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

How is PTO balance handled each year?

Core treatment

1. Statutory PTO cannot be forfeited
   • Any unused statutory PTO should not simply expire or be forfeited.
   • It must either be properly used, validly waived, carried over by agreement, or paid out where required.
      
2. Carryover may be possible
   • Statutory PTO may potentially be carried over until the end of the following year, if both the client/employer and employee agree.
   • If carried over PTO remains unused by the end of the following year, it may need to be paid out.
      
3. Encashment / payout risk
   • Payroll guidance referenced on the page indicates payout may be at 200% of daily rate.
   • However, the proposed treatment overview distinguishes between:
     • Leave properly taken,
     • Leave genuinely offered or assigned but declined in writing,
     • Leave not taken with no valid written waiver.
   • The highest-risk scenario is where leave is not taken and there is no valid written waiver, which may trigger 300% payout exposure (including normal salary of 100%).
      
4. Additional / client-provided PTO
   • PTO above statutory entitlement may be more flexible and could be subject to client policy.
   • This should be clearly separated from statutory PTO because statutory PTO has stricter treatment.

Annual Process by Remote

September — Annual leave reminder

• Remote sends an Annual Leave Reminder email to the client and employee.
• Purpose:
  • Remind the employee to start planning how to use remaining PTO before year end
  • Create early written evidence that leave was encouraged.

October — PTO balance check and formal reminder

• Remote checks the employee’s remaining PTO balance.
• Remote sends another reminder email, described as a Formal Leave Assignment notice.
• Purpose:
  • Confirm the remaining balance.
  • Formally remind the client to schedule PTO for employee.
  • Start documenting that leave was genuinely offered or assigned.

November — Manager assignment / waiver / carryover decision

• Remote sends another email asking the Client to assign PTO dates.
• Possible outcomes:
  1. Employee takes the assigned PTO
     • No premium payment is required.
  2. Employee rejects the assigned PTO for personal reasons
     • Employee should submit a Voluntary Waiver in writing.
     • If the waiver is valid, only normal salary is paid; no extra 200% premium should be due.
  3. Client and employee both agree to carry over the balance
     • Unused PTO may be carried over until the end of the following year.
     • This agreement should be documented in writing.

December — Follow-up

• Remote follows up on the November email.
• Purpose:
  • Confirm whether PTO has been taken, assigned, waived, or carried over.
  • Close any gaps before year-end.
  • Reduce risk of unpaid / unwaived unused statutory PTO triggering higher payout liability.

Overview