Are senior managerial employees entitled to claim overtime pay ?

Overtime pay is one of the most concerned issues among employers. However, neither the PRC Labor Law nor the PRC Labor Contract Law has distinguished the ordinary employees and senior managerial employees, which has caused confusion in reality. There are cases where general managers claimed daunting sum of overtime pay, posing both legal and ethical issue before judges.

Now, according to Guidelines on Proper Trial of Labor Disputes under Contemporary Macro Economic Circumstances, if in the employment contracts with senior officers, the salaries are set at a relatively high level and such senior officers have expressly waived its right to overtime pay, the courts will respect such agreements and will not support claims for overtime pay by such senior officers. It shall be noted that the Guidelines does not give guidelines as to how much salary will be regarded as “relatively high”.

Also, Guidelines on Proper Trial of Labor Disputes under Contemporary Macro Economic Circumstances is silent on who are senior officers. But according to PRC Company Law, senior officers shall mean the general manager, deputy general manager, financial controller of a company and the secretary of board of a listed company as well as other senior officers as so provided in the articles of association thereof.

Legal Provision:

Labor Law of the People’s Republic of China Article 44

The employer shall pay labourers more wage remunerations than those for normal work according to the following standards in any one of the following cases:

(1) Wage payments to labourers no less than 150 per cent of their wages if the labourers are asked to work longer hours;

(2) Wage payments to labourers no less than 200 per cent of their wages if no rest can be arranged afterwards for the labourers asked to work on days of rest;

(3) Wage payments to labourers no less than 300 per cent of their wages if the labourers are asked to work on legal holidays.