LawFlash
May 10, 2022
In response to the unfold of the COVID-19 omicron variant, Shanghai carried out a common lockdown in April 2022. This LawFlash supplies multinational corporations with operations in Shanghai, People’s Republic of China with steering on the epidemic management measures, in addition to on wage, termination, and resumption of operations points.
SHANGHAI POLICY
For the previous few weeks, Shanghai has carried out a three-zone epidemic management system, dividing completely different areas into lockdown zones, managed zones, and precautionary zones.
“Lockdown zones” refers to the residential communities, pure villages, or models which have had constructive circumstances in the previous seven days the place residents are required to be quarantined at dwelling for seven days and monitor and handle their very own well being standing correctly (self-health monitoring) for an additional seven days.
“Controlled zones” refers to the residential communities, pure villages, or models the place there have been no constructive circumstances in the previous seven days and the residents are required to conduct self-health monitoring for seven days.
“Precautionary zones” are the residential communities, pure villages, or models which have had no constructive circumstances over the previous 14 days and the residents are permitted to journey inside the avenue, group, or city in precept.
In addition, Shanghai has carried out the “2+12” quarantine coverage for the residents in the residential district, office, or college the place the shut contacts of a constructive particular person have been positioned. Specifically, the “2” signifies that the people must be quarantined at dwelling for 2 days with two COVID-19 checks carried out, and there must be greater than 24 hours between the two checks. The “12” signifies that the people ought to keep at dwelling for 12 days and will take COVID-19 checks accordingly and conduct self-health monitoring. For the secondary shut contacts of a constructive particular person, Shanghai has carried out the “7+7” quarantine coverage—i.e., seven days of quarantine and 7 days of self-health monitoring.
On May 9, 2022, Shanghai issued a brand new, broader coverage basically requiring all people who take a look at constructive in addition to their neighbors to be relocated to quarantine facilities. The scope of which neighbors are included relies upon in half on the native neighborhood committee and the dimension of the particular person’s dwelling or residence constructing.
SALARY
Currently, solely sure industrial enterprises and people enterprises which might be vital to the nation’s financial system and other people’s livelihood are allowed to renew operations, and most workers are required to do business from home, if possible. Where working from dwelling is just not possible, employers might must shut down partially or utterly.
The wage cost rules typically stay the identical as these issued in 2020 and place a heavy burden on employers as they continued to bear labor prices—typically at full wages—whereas their enterprise throughout the pandemic might have shut down utterly or considerably. On March 28, 2022, the Shanghai Municipal Human Resources and Social Security Bureau launched 16 Policies and Measures for Supporting the Fight Against Epidemic Diseases (March 2022 Measures). According to the March 2022 Measures, for these workers who take a look at constructive or have been or are recognized as shut contacts of the constructive circumstances and subsequently are below quarantine and can’t present companies to the firm, the firm is required to proceed to pay them their common wage as if they’re working throughout this time. After the quarantine interval, if the workers nonetheless must obtain medical remedy and can’t work usually, the corporations ought to pay them in accordance with the relevant legal guidelines and rules governing the medical remedy interval.
That mentioned, authorities rules have additionally supplied flexibility for employers to handle this burden. For instance, the March 2022 Measures present that in the occasion of a shutdown because of management measures taken by the authorities, corporations and their workers ought to deal with such points as wages and advantages by way of session to the biggest extent doable in order to beat the difficulties collectively. Generally, to implement a complete or partial shutdown because of the COVID-19 state of affairs, the employer might want to seek the advice of with the workers. The employer is required to pay workers their full wage for the first full wage cost cycle. After the first full wage cost cycle, if the employer can’t resume common operations, then the employer pays the workers the native minimal wage, topic to the worker session course of relevant to a shutdown. The minimal wage in Shanghai is at present 2,590 Chinese yuan ($385) per 30 days in Shanghai.
In addition, on April 6, 2022, the Shanghai Higher People’s Court issued Several Opinions on Judicial Services to Guarantee Epidemic Prevention and Control and Economic and Social Development (April 2022 Opinions). According to the April 2022 Opinions, the authorities is encouraging employers to rearrange for versatile working preparations for these workers who can’t present companies usually because of the COVID-19 state of affairs, which incorporates adjusting salaries, arranging shifts, lowering working hours, and dealing from dwelling. In addition, for these workers who can’t work remotely, employers may exhaust the workers’ paid break day, comparable to annual depart and compensatory break day.
Furthermore, employers also can contemplate inner means to scale back prices, comparable to by freezing, lowering, and/or delaying scheduled wage will increase and/or bonuses and/or eliminating benefit and/or price of residing will increase. Employers have appreciable latitude to get rid of or scale back discretionary will increase comparable to these unilaterally, so long as they don’t lower the workers’ base salaries with out specific written consent.
TERMINATION
With respect to the termination of workers, the coverage stays the identical as that issued in 2020. Public coverage and rules in the People’s Republic of China (PRC) encourage employers to use all cost-cutting measures mentioned herein, in addition to different financial measures supplied to scale back the financial burden on employers in lieu of conducting layoffs. One such measure which stays obtainable to industries with monetary difficulties is the postponement of the cost of the contributions to the pension scheme, which makes up the largest proportion of the employer’s complete social insurance coverage contributions for its workers.
The PRC authorities has made clear that employers might not terminate the employment of these workers who’re contaminated or suspected of being contaminated with COVID-19 below both Article 40 (which covers the expiration of the medical remedy interval, poor efficiency, or a serious change in goal circumstances below which the contract can now not be carried out) or Article 41 (mass layoff) of the Labor Contract Law (LCL), efficient as of January 1, 2008, and as amended.
In addition, if the employment contract expires for such workers who’re below the obligatory quarantine or throughout the medical remedy interval, the time period of the employment contract is to be prolonged till the obligatory quarantine or medical remedy interval ends. Termination on different grounds, comparable to misconduct, for these workers remains to be legally permitted, however will likely be carefully scrutinized in the occasion of a authorized problem to the termination.
USE OF ESIGNATURES ON EMPLOYMENT DOCUMENTS
Normally, an employer and worker are required to execute the employment contract with a moist signature. However, recognizing the difficulties for candidates to print and signal at dwelling and with the common lack of ability to ship authentic paperwork by way of courier throughout the present lockdown, the authorities has issued rules allowing esignatures to alleviate these difficulties, if mutually agreed between the firm and the worker/candidate.
In addition to the employment-related legal guidelines and rules, the execution of an digital employment contract, in specific, ought to comply with the necessities below the Electronic Signature Law, together with that (1) the econtract service platform is certified below PRC legislation; (2) the digital employment contract makes use of dependable esignature and information messages that may be recognized as the written kind by legislation; and (3) the employer ensures that the formation, transmission, and preservation of the digital employment contract is full, correct, and never falsified. In addition, if the employment contract will likely be transferred exterior the nation, as a result of it comprises the worker/candidate’s private information, the employer ought to get hold of the particular person and specific consent from the worker/candidate below the Personal Information Protection Law, which took impact on November 1, 2021, for such switch.
While the relevant rules don’t expressly cowl different employment paperwork, throughout the present lockdown, corporations might undertake the identical esignature precautions used for employment contracts for different employment-related paperwork and have the events present moist signatures to these paperwork later, when circumstances allow.
RESUMING OPERATIONS
On April 17, 2022, the Shanghai authorities issued pointers for industrial enterprises to renew operations. The 666 enterprises on the whitelist issued on April 11, 2022 might resume operations. The majority of those corporations fall below the built-in circuit, vehicle manufacturing, tools manufacturing, and biomedicine industries.
Specifically, to renew operations, the firm ought to (1) formulate a administration proposal and set up a selected group for COVID-19 prevention and management; (2) divide the plant into completely different areas and implement correct and differentiated managerial measures respectively for every space; (3) improve administration over all workers, together with monitoring their every day well being standing and conducting COVID-19 checks twice per day (one antigen take a look at and one nucleic acid take a look at); (4) improve the logistics administration inside the plant and put together ample tools for epidemic prevention (e.g., masks, alcohol, take a look at kits, and many others.); and (5) put together emergency and contingency plans to manage the state of affairs as a lot as doable in case there’s a constructive case in the plant.
The necessities for different enterprises to renew operations in the future will doubtless resemble the necessities set out above, however it can take time for workplace buildings to reopen, as the motion of individuals—significantly throughout district traces—stays restricted, and buildings will doubtless must put in place a course of to obtain a unfavourable nucleic acid take a look at report from every worker as a prerequisite to enter the workplace. Until the state of affairs totally stabilizes, guests are anticipated to face additional restrictions.
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CONTACTS
We proceed to watch the newest rules relating to the employment points throughout the COVID-19 outbreak in Shanghai. If you could have any questions or would love extra info on the points mentioned in this LawFlash, please contact any of the following Morgan Lewis legal professionals:
Beijing/Shanghai
Okay Lesli Ligorner
Shanghai
Xiaoqian Zhou
Beijing
Yuting Zhu