19 April, 2017
Not only is China’s chronic air pollution making it difficult for companies to lure employees to work in the country, the dirty air may see employers having to pay more for the employees who are here.
The biggest cost for employers may be the salaries paid to employees who can’t work when companies are required by the government to reduce or suspend operations when air quality index (AQI) levels are exceeded. With no uniform national guidance, employers are left to look at local rules (which are not consistent) for the ascending blue, yellow, orange and red alert levels. In Shanghai, a blue alert is generally when the AQI is between 151 and 200. Under a Shanghai blue alert, most outdoor construction projects must stop.
In contrast, Suzhou, Nanjing, and Beijing construction suspensions are required only under the more serious yellow alerts. Moreover, employers in the petrochemical, chemical, metallurgy, cement, building materials, casting, and concrete industries under a yellow alert (generally 201-300 in Shanghai) must reduce production. For the highest level of orange 300-400 and red alerts (above 400 AQI) reduction and suspension requirements become stricter.
In the past two years, Beijing has issued three red and three orange alerts covering a total of 30 days. While Shanghai has not endured such serious air pollution during this period, the city has seen 15 days affected by blue and yellow alerts.
While no national law has yet directly addressed the salary obligations of an employer during a pollution-induced closure, the default rule is that employers must continue paying when a suspension is not the fault of the employees. Still, local jurisdictions, such as Shanghai and Ningbo, are starting to issue rules confirming that employers have the obligation to pay full salary and not deduct benefits during severe pollution. Shanghai and Ningbo also prohibit employers from disciplining or terminating employees who are late or absent from work due to severe air pollution—which could conceivably include situations when employees can’t make it to work because of suspension of public transport. Employers also must develop plans clarifying the circumstances under which employees may not be required to go to work and conditions necessary for resuming operations.
In an example of the requirements the rest of the country may see, employers in Ningbo are also required to protect employees who work outside. Hours must be reduced during yellow alerts and employees provided with masks. During an orange alert, hours must be further cut back and additional proactive equipment provided, and air cleaning machines installed indoors. During red alerts, employers should avoid assigning employees outside unless absolutely necessary. Employers who violate these requirements could be fined up to RMB 30,000.
The desire to keep the air clean may also shift costs to employers, such as during required suspensions or closures for high profile events. Examples include last year’s G20 Hangzhou Summit or international sporting events, such as can be expected for the Beijing 2022 Winter Olympics. A practical approach of many companies during these periods is to require employees to use up their paid annual leave.
Ningbo already requires extra pay for employees working outside during heavy pollution. Other locations may soon follow. Members of the Shaanxi Provincial Committee of the Chinese People’s Political Consultative Conference reportedly reintroduced a proposal in January at the opening session in Xi’an that outdoor workers should receive “hazard pay” during periods of high pollution. According to the proposal, local governments — not employers — would pay allowances to workers, including construction workers. The provincial human resources and social security department and trade union federation have reportedly been studying the feasibility of such a proposal since last year.
Members of the Henan Provincial Chinese People’s Political Consultative Conference also reportedly submitted a proposal for smog subsidies for outdoor workers. The idea appears to be gaining traction – the influential Party newspaper Guangming Daily has suggested that companies that produce air pollution should be charged fees that the government could use to compensate workers who work outdoors.
What about employees who tire of working in a polluted city? Could the dirty air be grounds for them to quit and get severance?
Not likely.
While failure of an employer to provide safe working conditions could entitle an employee to severance, an individual employer could not be blamed for city-wide pollution that makes an employee want to leave. Employees who no longer want to breathe polluted air would likely have one choice: resign from their job and move elsewhere.
Some relief may be available for employees who become ill due to long hours working outside in heavy air pollution. The Shaanxi delegates in January called for “haze” to be listed among occupational disease risk factors and thereby possibly allowing workers to claim occupational illness benefits. If so, claims may mushroom. After all, the hours spent commuting while breathing the poor air is also considered work time.
Resource
“Peering into the Future” by Jeffrey Wilson
March-April 2017 issue of Insight, the American Chamber of Commerce in Shanghai.
