Shanghai has historically maintained its own sick leave pay rules, which were independent of and significantly more generous to the employees than the national standards under PRC law. These local rules were renewed periodically by the municipal government. However, Shanghai recently seemed to discontinue this practice by allowing the Notice of the Shanghai Municipal Labour Bureau on Strengthening Administration of Employees’ Sick Leave to Ensure Employees’ Livelihood during Sick Leave (Hu Lao Bao Fa [1995] No. 83) (the “Circular 83“) to lapse on 15 August 2026, without renewal.
According to the Shanghai labour authority, following the lapse of Circular 83 and without new local rules being established, the national standards will apply, and no new local rules are currently being contemplated.
1. Applicable National Standards
The national standards are set out in the Opinions on Several Issues concerning the Implementation of the PRC Labour Law (Lao Bu Fa [1995] No. 309). Unlike the tiered sick leave pay rates under Circular 83, which were pegged to the specific employee’s years of service, the national standards only prescribe a single minimum rate for all the employees regardless of their years of service, namely, 80 percent of the local minimum wage. Employers may independently determine the specific amount of sick leave pay, as long as the sick leave pay paid by the employer are not lower than this minimum threshold.
The current monthly minimum wage in Shanghai is RMB 2,740 and 80% of that will be RMB 2,192. This means that from 16 August 2026, employers in Shanghai may pay as minimum as RMB 2,192 per month to their employees on sick leave, provided no more generous contractual terms or internal rules apply.
2. Binding Effect of Shanghai Employers’ Existing Internal Sick Leave Pay Standards
The national standards set only a floor, not a ceiling. They do not prevent the employers from offering more generous sick leave pay to their employees. Accordingly, if a Shanghai employer has existing internal sick leave pay standards which are more generous than the national minimum, those standards may remain valid and binding and have to continue to be honoured.
3. Practical Recommendations
If employers wish to take advantage of the national standards, thereby reducing labour costs, they may consider revisiting and reasonably amending their existing internal sick leave pay rules, to be in line with the national minimum. However, it is notable that to make the new sick leave pay rules effective and binding upon the employees, the statutory procedures for amending employers’ internal rules and policies concerning employee’s rights and interests (such as consulting the employees and seeking their opinions and making the new rules known to the employees) must be followed. If the sick leave pay standards happen to be specified in the agreements with the employees, consents of the employees to the revisions would generally be required.
Employers are also reminded to monitor closely any possible new local sick leave policies to be promulgated by the Shanghai local government.
For further information, please contact:
Elsie Chan, Partner, Deacons
elsie.chan@deacons.com
