China: Annual Leave Policy

Statutory Minimum Entitlement

Note
Under Chinese labor law, an employee's statutory annual leave entitlement is determined strictly based on their cumulative work experience (total career working years in China), rather than their tenure with their current company alone. Consequently, employees must provide official supporting documentation to verify their total career history and accurately establish their leave entitlement. 

Supporting documents

• During the onboarding, please provide social security contribution records
• Employee may also provide previous employment certificates or labor contracts as a further confirmation

Proration Calculation

Carryover Policy - employer to select from either option:

How do we ensure compliance when managing China carryover leave balances?

Phase 1: Early Reminders & Operational Clarity (September)

The goal here is to establish early good faith and outline how the system prioritizes expiring balances.

Issue Initial Reminders: Send clear communications around Sep - Oct outlining carryover balances and platform logic (e.g., how the platform pulls expiring leave first).

Establish Statutory Rights: Explicitly state in the communications that the company reserves the statutory right to formally allocate leave dates later in the year if employees do not schedule them early. This protects operational continuity.

Phase 2: Manager Alignment & Operational Preparation (October)

Crucial Step: Preventing conflicting instructions between Client and their managers.

• Engage Managers Early: Client to partner with managers to review outstanding balances.
• Coordinate Workloads: Ensure managers do not assign critical projects during blocks where employees might be directed to take leave. This prevents employees from later claiming they were "forced to work."

Phase 3: Directives, Formally Assigned Leave, & Waivers (October - November)

The legal core of the process—actively arranging the leave or capturing the reason for non-use.

• Issue Directives: Formally assign leave dates for employees with remaining balances.
• Enforce Zero-Work Policy: If an employee is unilaterally assigned leave dates but still logs on or sends emails, managers must actively instruct them not to work. Passive acceptance of work in strict provinces (like Beijing) can be legally interpreted as permitting them to work, triggering payout liabilities.
• Collect Written Waivers: If an employee refuses the assigned leave, secure a signed written waiver attributing the untaken leave to "personal grounds."
• Track & Log Payout Status: Update Remote platform based on the waiver:
• If signed for personal reasons: Note that the balance is marked for a 100% standard payout (or zero payout if the employment contract specifies that normal daily salary covers standard working days), completely eliminating the 300% statutory penalty risk.

Phase 4: Year-End Payout Execution (December)

Achieving clean administrative closure through Remote.

• Process Through Remote: For employees who signed the waiver (or whose leave truly could not be taken due to a critical company emergency), trigger the appropriate payout via Remote.
• Standard Rate Closure: Process the payout at the standard daily rate to ensure smooth compliance and clean records.

Core Compliance Ground Rules to Remember

No Balance is Too Small: Do not limit this process to employees with "material" balances. Under Chinese labor law, even a 0.5-day untaken statutory balance can trigger a labor bureau dispute. Track and resolve all remaining carryover balances regardless of size.

Active Enforcement Matters: Unilaterally assigning leave dates is not enough if the employee still works. Managers must actively prevent them from working during that block to protect the company from strict provincial rulings.