06 January 2016

The legal bottom line of part-time employment

This article was written by Linda Liang(Partner) and Zhang Jingjing(Associate)

An increasing number of employers are resorting to part-time employment in practice. Compared to full-time employment, the former bears more flexibility for both the employer and employee. For the employer, part-time employment features low cost and more freedom in contract termination; for the employee, it means shorter hours and multiple jobs.

According to Articles 68 to 72 of the Employment Contract Law, part-time employment possesses the following features:

  • Various payroll calculation systems: hourly wage is most practiced, other systems include daily, weekly and monthly salaries; 
  • Flexible hours: the employer works no longer than 4 hours daily and 24 hours weekly;
  • Short cycle of payment: the longest cycle of payments no longer than 15 days with daily, weekly and biweekly payment in use.

Actual practice of the above characteristics may vary depending on the employment unit. For instance, due to the restriction of an employer’s internal financial procedure, it might not be able to maintain a biweekly payroll system but instead opts for month payments. In cases where a dispute occurs, due to the fact that an employer might not have conformed to every requirement of part-time employment as provided by the law, the employer could be deemed as having established a full-time employment relationship with the employee, leading to rulings that require the employer to reissue severance, overtime and bonuses to the employee.

Based on the above statement, this article aims to identity the legal bottom line in part-time employment and risks that might follow failures to comply. 

1 Working hours: a crucial factor that has the power to negate the effectiveness of part-time employment

Through research, various cases show that arbitrators and judges are strict about working hours. It is highly likely that full-time employment relations are determined by overtime. 

For example, in the case[1] where the employee is an hourly worker who mainly prepared lunch from 8:30am to 1pm on business days, although work time only exceeds the statutory limit by half an hour every day, and the accumulated working time was no longer than 24 hours, the case was still ruled on full-time employment relations because according to the court, 4.5 hours of work time exceeds the legal limit of part-time employment.

Therefore, statutory requirements are to be stringently followed in a part-time employment contract. Moreover, the employer is recommended to keep official records of work hours such as attendance sheets and punch edits to prevent possible repercussions in case of disputes.

2 Cycle of payment: a slightly less crucial factor that might negate the effectiveness of part-time employment combined with other factors. 

In practice, quite a number of employers, due to the restriction of their internal financial capabilities, opt for monthly payments to part-time employees, which poses a threat to determination of part-time employment depending on the actual circumstances.

In the case[2] where a company claimed that the employee was not employed on a full-time basis and worked for no more than 12 hours every month, the court still dismissed the claim of part-time employment on account of the payment system with the ruling also taking into consideration the fact that the company had agreed to pay the employee severance and contribute social insurances in emails.

In another case[3], the employee concluded a part-time employment contract with the company and was paid on the 25th of every month. The court held that “the cycle of payment exceeds the legal bottom line, which is 15 days, and that the company failed to provide any attendance record to prove otherwise, hence negating part-time relations in the final ruling.

Conclusion: all things considered, both factors are with the “veto” power to a degree. It is recommended that the employer strictly follows relevant legal requirements to minimize risks in case of disputes. 

3 Payroll calculation:  Flexible under certain circumstances, hourly wage is most practices with monthly wage also in use; subject to change upon agreement, but relevant laws need to be strictly obeyed

In a case[4] where an employee and a company agreed in the part-time employment contract that the position is supervision and basic monthly salary is RMB 1,600 which is paid every 10 days and accompanied by a bonus at the end of every month. The court held that hourly salary is not the only standard in affirming part-time employment and eventually ruled based on part-time employment relations. 

4 Legal consequences of failure to comply

The court tends to rule in favor of the plaintiff in disputes where full-time employment is established. Below is a list of the legal consequences often seen in practice:

  • Doubled payment of salary difference without a previously signed employment contract
  • Difference of salary from the local minimum salary
  • Compensation for unused annual leaves
  • Overtime pay
  • Severance for termination of the employment relationship or double severance for an illegal termination

In conclusion, of the three factors in ascertaining part-time employment relations, working hours and the cycle of payment must be strictly complied with, otherwise legal risks might follow.. There is flexibility in the payroll calculation system as long as relevant legal requirements are met with.

(This article was originally written in Chinese, and the English version is a translation.)

Editor’s note: This article was simultaneously published on Chinalawinght.com

[1]Zhang Baozhen V. China Silk Company, First Instance, (2015) Xi Min Chu Zi No. 08488

[2]Wang Xia V. Beijing De Yuan Bo Rui, First Instance, (2015), Hai Min Chu Zi No. 05610.

[3]Wei Xianzhu V. Hua Run Shuang He Medical, Appeal, (2015), San Zhong Min Zhong Zi No. 05368.

[4]Beijing Shi Chuang V. Li Yanyan, Appeal, (2015), Er Zhong Min Zhong Zi No. 03357.

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