Annual leave is paid time off work granted by employer to employee in accordance with Chinese relevant laws and regulations. The employees of units such as authorities, organizations, enterprises, institutions, private non-enterprise units and individually-owned commercial and industrial businesses with employees that have been worked continuously for more than one year are entitled to paid annual leave. Here are 5 points of annual leave need to be noted.
Firstly, the paid annual leave shall be based on the total working years instead of the other factors such as labor intensity. The rules of annual leave are stipulated in the following table:
Accumulative Working Years—————— Days of Annual Leave
Served one full year but less than 10 years—————— 5 days
Served 10 full years but less than 20 years—————— 10 days
Served for 20 full years—————— 15 days
National statutory holiday and rest days are not included in the annual leave. An employee is not entitled to annual leave for the current year if he is under any of the following circumstances:
1. The employee is entitled to summer and winter vacations in accordance with the law and the number of days of such vacations is more than that of his annual leave;
2. The employee has taken more than 20 days of casual leave accumulatively and his unit does not deduct wages in accordance with provisions;
3. The employee has served one full year accumulatively but less than 10 years and has taken more than two months of sick leave accumulatively;
4. The employee has served 10 full years accumulatively but less than 20 years and has taken more than three months of sick leave accumulatively;
5. The employee has served more than 20 full years and has taken more than four months of sick leave accumulatively.
6. The employee shall not be entitled an annual leave for next year if he has enjoyed the annual leave this year before the circumstances arise which are mentioned in 2 to 5 above.
Secondly, in accordance with the interpretation of Human Resources and Social Security Department in China, “employees have been worked continuously for more than one year” includes two situations. One situation is that he has been worked in the same unit continuously for more than one year. The other situation is that he has been worked in different companies or discontinuously worked in the same unit but the total working time is more than one year. Please note that under the second situation the interval shall not exceed one month.
Thirdly, the calculation for the number of days of annual leave in two special cases are as follows: The days of annual leave which may be taken by a new employee who is entitle to have an annual leave in the current year shall be calculated according to the formula that the number of days from the time when he is employed by this employer to the end of the calendar year/365 × the days of annual leave he is entitled to. The calculation formula for the departed employee is the same as the previous one. The result of calculation shall reserve the integer part, for example, if the result is 2.9 days, it shall be 2 days.
Fourthly, Annual leave may be centrally arranged within one year or in several periods and does not span more than one year in general. Units may make such arrangement that spans more than one year if they have a genuine need for such arrangement due to production and job specialties. For example, an employee shall have the right to enjoy his/her annual leave for 2015 before the end of 2016.
Fifthly, the compensation and calculation formula for the wage income of the employee’s annual leave time should have been taken but otherwise are as follows: According to the Chinese relevant laws and regulations, in respect of the annual leave that should have been taken but otherwise, units shall pay wage remuneration to such employees at the rate of 300% of the daily wage income of such employees. In other words, units shall pay the employee a daily wage income plus double the wage as compensation. The calculation formula for the wage income is the monthly wage income × 200%. The monthly wage income mentioned in the preceding refers to the average monthly wage for 12 months which deducted the overtime pay and the thirteen month salary before the employer pay to the employees the wage income of the annual leave not taken. If the working days of employees are less than 12 months for their employer the monthly wage income mentioned in the preceding refers to the average monthly wage in accordance with the actual working days. The wage income of the employee’s annual leave time should have been taken but otherwise shall be claimed on January 1st the year after next. The effectiveness for a given period of time shall be one year. For example, if an employee has not enjoyed his/her paid annual leave in 2015, he shall claim the wage income during the period of from January 1st, 2017 to December 31st, 2017 otherwise, it will not be approval.
Mr. Wangdong has been in practice for 15 years and specialists in commercial law.He also has expertise in intellectual property law. He has high credibility amongst his clients and has accumulated great respect from his foreign partners who have maintained long term business relations with him.