Active Investigation into Overworking Launched by Government Across Multiple Locations in China

Local governments across multiple locations in China have issued notices announcing the launch of campaigns to rein in on the practices of overworking in companies. Starting from Beijing on 15 March 2022, and then Shandong, Henan, Anhui, Hunan, Jiangxi, Hubei and Qinghai, with more to follow. Relevant actions include active investigations into companies’ policies on working time and leave, what hours are employees working, how employees are taking vacation, how they are being compensated for overtime work, and encouraging employees to report non-compliant working time and leave practices through various channels.

Overworking is an issue that affects many companies. Despite the requirement for employees to work no more than 8 hours per day and 40 hours per week has been effective since 1995, overworking has been prevalent in many industries across different types of companies, including domestic and foreign invested companies. Historically, government enforcement in this area has not been strong, with issues mostly brought by employees as a claim for more pay in the form of overtime wages.

The transformation of today’s workplace from traditional office or factory environments to more mobile or diversified ways of working anytime, anywhere, and increased communication with people across different time zones, whether as a result of COVID-19 or general technological advancement, has blurred the lines of working and non-working time and exacerbated the issue. In recent years, the “996” work pattern (9am-9pm, 6 days a week) and hustle culture in tech companies have been widely criticised in the media. There are also cases of sudden employee death suspected to be related to overworking that continues to be reported and widely discussed in social media. The government started to take some actions to regulate overtime issues, such as more active handling of employee complaints, and publishing model cases late last year to guide the courts in how to rule in overtime disputes. These remained more at the level of employees bringing their own claims.

However, the latest government notices marks a shift as the government takes a more active stance in investigating and supervising overworking in the corporate environment. This is consistent with the wider national policy on reducing burden to encourage growth in the birth rate. Although at current stage, as far as we know, only the above listed locations have issued such notices, it is very likely that similar operations will be widely carried out in other cities and provinces across the country in the near future.

Generally, the investigation will be launched in the form of labour audit. If an employer is targeted by the labour bureau, it will be requested to prepare a list of related documents in a very limited timeframe and be asked various questions (click this link for an outline of the process). And if the employer is found to be non-compliant during the checking, it will be imposed on administrative penalties according to applicable laws and be urged to rectify within a time limit. What’s more, once the non-compliant /punishment is known to the public, the company's reputation will inevitably be damaged.

In light of the wide targeted investigation, it is advisable that all employers take these key actions:

• Conduct self-examination on possible non-compliance aspects.
• Get prepared for labour audit. An employer should ensure that its employee-related documentation is in good order in case an investigation is launched and should be well prepared to answer questions from the labour bureau officer in order to ensure that the investigation is completed smoothly.
• Review corresponding internal policies on working hour and vacation to ensure they are in compliance with the law and up to date.
• Apply for flexible working hour system or comprehensive working hour system as needed.