Application for Special Working Hour Scheme
An increasing number of corporates in China are applying for a Special Working Hour Scheme nowadays. What is it and why do they apply for it? What challenges do they face during application for this scheme? We will examine these issues in detail here.
Types of Working Hour Arrangements in China
There is a need to understand the current types of working hour arrangements in China before examining the Special Working Hour Scheme.
Standard Working Hour Arrangement
This is the working hour arrangement under general situations. In China, the standard working hour period means 8 working hours a day for 5 days a week, which total 40 hours a week.
Flexible Working Hour Arrangement
As this arrangement does not stipulate the on or off duty times in each working day, the working hours under the arrangement are not fixed.
Integrated Working Hour Arrangement
This arrangement does not have any fixed number of working hours each day and working days in a week as long as the total number of hours worked in a week is 40. For example, the employee may work for 7 hours a day on weekdays and 5 hours on Saturday (total of 40 working hours in a week). Saturday would be considered a normal working day in this example.
Companies that wish to implement the flexible working hour and integrated working hour arrangements must apply to the Ministry of Human Resources and Social Security to be registered under the Special Working Hour Scheme.
Why do corporates want to apply for the Special Working Hour Scheme?
Under the standard working hour arrangement, the employee must, and can only, work 8 hours. If overtime occurs, the company will incur additional costs in the form of overtime payments. Such a fixed arrangement may not be suitable in today’s increasingly complex economic environment because it might not be cost-effective for the business.
Companies registered under the Special Working Hour Scheme can overcome this challenge. Firstly, such a scheme is cost-effective because the company only needs to pay employees to work during time periods that best suit its business model. This significantly reduces overtime payments.
Secondly, it gives the company more flexibility to deploy manpower resources during periods when they would be more fully utilised.
The scheme may also benefit employees because its cost-effectiveness allows for more sustainable employment and reduces the risk of lay-offs or pay cuts. In addition, they would still be paid for overtime if they are required to work beyond their normal working hours.
Challenges during application for the Special Working Hour Scheme
It is now much more difficult to apply for the Special Working Hour Scheme than in the past. Some companies had reportedly extended their scope of implementation of the Special Working Hour Scheme beyond what was considered “reasonable” to avoid overtime payments. Meanwhile, there has been an increase in public concerns over employees’ rights and work-life balance. Consequently, the government now strictly controls the approval process.
An example of an application process for the Special Working Hour Scheme in Shanghai is shown below:
- Company submits documents of its proposed Special Working Hour Scheme to local manpower bureau
- Local manpower bureau receives documents
- Local manpower bureau checks documents
- Application approval
- Company informed of application result
- Company announces successful application result to the public
Government officers would check the documents submitted during application very thoroughly and assess the accuracy, necessity and reasonableness of their contents. They may also request for more supplementary materials or return rejected documents.
Based on our experience and various cases, there are several common reasons why applications for the Special Working Hour Scheme may be rejected. These are explained below.
Failure to demonstrate a compelling need for the Special Working Hour Scheme
The government officers may determine that the company can address its manpower challenges through other arrangements such as flexible office duty hours or shift duty adjustments. The company therefore needs to show that the Special Working Hour Scheme is its only solution.
Positions are not within the legal scope
Laws and regulations stipulate specific positions that are covered by the Special Working Hour Scheme. Examples include the senior management team, outworkers, sales personnel, certain operators, and transport staff. If the company applies for positions that fall outside the legal scope, the application is likely to be rejected.
Absence of employee consent
As mentioned earlier, there is an increase in public concerns over employees’ rights, which has attracted greater scrutiny from local authorities. Proposed changes in work arrangements would also affect the working conditions and labour contracts of employees concerned.
It is therefore necessary for the written signatures of such employees to be present in submitted documents proposing changes in work arrangements to indicate their support.
Absence of Proper Off Day or Leave Arrangements
If the application does not indicate proper off day or leave arrangements to compensate for non-conventional working hours, it would be more likely to be rejected.
Abuse of Special Working Hour Scheme
If the government officers determine that the proposals submitted during application amount to an attempted abuse of the Special Working Hour Scheme to extend employees’ working hours and avoid overtime payments, they would reject the application.
Companies should bear in mind that other parties are also involved in preparing the application for the Special Working Hour Scheme. For example, experienced professionals are needed to check the documents that would be submitted, assist in making a detailed implementation plan, or communicate with the employees concerned to gain their support.
Even if the application is successful, the company also needs to monitor implementation of the Special Working Hour Scheme to ensure that staff benefits are not negatively affected. This is essential as any staff complaints to the authorities may reduce the chances of successful future applications for renewal under the scheme.
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