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
   • The employer is responsible for arranging statutory annual leave within the applicable leave year.
   • Unused statutory leave must be handled through an agreed carryover, a valid written waiver initiated by the employee, or the required payout. It must not expire.
      
2. Carryover requires agreement
   • Where business needs prevent leave from being taken in the current year, statutory leave may be carried over to the following year with the employee’s consent.
   • Carryover should not be decided unilaterally by either the client or the employee.
   • Any carried-over balance should be used by end of subsequent year
      
3. Payout Types
   • If the employee takes the leave, they receive their normal salary.
   • If the employer properly arranges or offers the leave but the employee declines it for personal reasons (in writing), employee shall receive encashment at 200%
   • If the leave is not taken because the employer did not arrange it—and there is no valid written employee waiver—employee shall receive 300% of the employee’s daily wage for each unused statutory leave day. This amount includes the 100% normal salary already paid, so the additional payment is 200%.
      
4. Additional / client-provided PTO
   • Leave granted above the statutory entitlement may generally be governed by the employment agreement and the client’s policy, including any carryover or forfeiture rules.

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 start assigning PTO dates or formally agree to carry it over through the end of next year with employees
  • Start documenting that leave was genuinely offered or assigned.

November — Client to confirm final 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 and should submit a Voluntary Waiver in writing.
  3. Client and employee both agree to carry over the balance and document the agreement in writing.

December — Follow-up

• Remote follows up on the November email.
• Purpose:
  • Final check on all accrued unused PTO balance
  • Final confirmation on the treatment of unused accrued PTO
  • Reducing risk of triggering higher payout liability for unused statutory PTO

Overview