Hawksford: FAQs for Managing your Business in China During the Coronavirus Outbreak

24 Febbraio 2020

Dear Members and Friends,

The China-Italy Chamber of Commerce is glad to share an article that Hawksford has published on FAQs for Managing your Business in China During the Coronavirus Outbreak.

If your business is an employer in China, you’ll want to make sure your staff are being cared for while your business interests are being preserved and managed. It’s critical that you’re fully informed about the contractual HR and risk management implications. Hawksford is actively supporting clients with contractual provisions and guidance with regard to coronavirus. Below is a summary of the most frequently asked questions for our clients and others seeking guidance so that you can make the most suitable provisions for your staff and operations at this challenging time.

Q1: Can enterprises resume work while the government has mandated delays to the resumption of work hours due to coronavirus? 

Any enterprise seeking to resume work before the government advised dates is obliged to file an application of work resumption to the relevant authorities in China, namely the PRC State Council and local municipal governments, and explain their reasoning.

Revised Lunar New Year Holiday Schedules:

24 provinces and cities in China announced a further extension of the current Lunar New Year holiday. These are as follows: Anhui, Chongqing, Fujian, Guangdong, Guangxi, Guizhou, Hebei, Heilongjiang, Henan, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Suzhou, Xi’an, Yunnan, and Zhejiang. All have stated that non-essential businesses need not re-commence their operations until Monday, February 10.
Hubei Province, where Wuhan is located and the center of the coronavirus outbreak, has stated that the holiday period will last until at least February 14.
Beijing stated that companies should let employees work from home from was until February 9, while Tianjin has urged companies to not resume operations until further notice.

Q2: Can employees work from home during the mandated postponement period?

Yes. The purpose of the government’s proposal of postponement is to prevent the outbreak spreading further and to contain the virus as much as possible. The government encourages China-based businesses to maintain routine operations by enabling staff to work from home and to use teleworking/distance working technology where possible.

Q3: Do businesses carry the legal liability for missing pay day due to this government issued policy on holiday extension?

According to regulations, salary payments must be made on the day agreed in labor contracts and be paid one working day in advance in the case of public holidays or weekends. Those businesses impacted by the current epidemic should pay wages to employees as soon as possible after business resumes.

Q4: What happens if employees still go to work or work from home during extended holidays? Should this be treated as overtime work?

Yes, if an employee is requested to come to the enterprise during their extended holidays, or to work from home, they shall get compensatory leave or 200% overtime pay under the standard working scheme.

Q5: How do we deal with employee contacts during isolation periods or absences due to issues such as transportation and city disruption?

Businesses must pay salaries as normal to any employees restricted by the isolation period or not able to resume work on time due to issues like sealing off cities or transportation problems. Businesses should not dismiss employees in these circumstances based on Clause 40 and Clause 41 of the Labor Contract Law. Enterprises should also extend employee contracts until medical treatment is completed if the contract was due to expire during the treatment period.

Q6: What if marriage or funeral leave and extended holidays overlap? Should marriage or funeral leave be postponed?

There is no policy from the Chinese government regarding this as of yet. If there is no clear mention regarding this in the enterprise staff handbook, marriage or funeral leave should be extended.

Q7: If home visiting leave and extended holidays overlap, should home visiting leave be postponed?

Home visiting leave shall not be extended in this case. This is also applicable to maternity leave.

Q8: What can foreigners and locals do to be cooperative during epidemic prevention and control?

It’s advised that employees should be extra cautious when it comes to self-protection; avoid crowded public places and take effective measures to prevent infection. It’s strongly advised that employees actively cooperate with local communities and inviting entities in taking preventive measures, abiding by relevant laws and regulations and following instructions from public security organs, immigration authorities, and hygiene and health authorities.

Q9: What should companies do to protect and support staff in this situation?

Companies should implement security measures that all staff should respect when working in the office, which means constantly monitoring the temperature of staff, giving guidelines about hygiene practices and collecting information about places staff have recently visited.

Q10: How can Hawksford help in terms of compliance obligations and contract performance?

Hawksford’s Chinese and international teams are actively supporting clients in relation to the coronavirus outbreak and the related implications to business operations. With a comprehensive understanding of your business in China and Hawksford’s commitment to serve you in your best interests, Hawksford can assist you with the following HR and legal consultancy aspects:

  • Negotiating with PRC authorities for deadline extensions, such as for the renewal of certain certificates.
  • Communicating and negotiating with your contractual partners for a prolonged period for contract performance.
  • Assisting in exploring the possibility of rent exemption or reduction with your landlord(s).
  • Applying for a force majeure certificate when the completion of your contract is delayed or has become unrealizable.
  • Assisting with any internal HR work when the client doesn’t have an internal HR department and now has specialist staff needs, including assisting in layoffs, termination, re-negotiations of employment and much more.

Francesca Scortichini, Associate Director of Account Management China at Hawksford says: “Although it’s difficult to predict the size and duration of the consequences of this epidemic, in our view companies should adopt a long term strategy as China is a long term growth market that will recover stronger than ever as soon as the outbreak is defeated. In other words, companies should not stop looking at opportunities and invest in what will make them stronger tomorrow. In this difficult time Hawksford is closer than ever to our clients and available to support and advise them in how to win in this challenge.”

In this extraordinary situation, companies may need to adopt several measures to embrace sudden and new challenges, such as handling the reactions of employees, clients and suppliers. However, in our view, they should not lose focus on the market and should keep investing and seeking opportunities while minimizing the fixed costs in the short run. If you’re already based in China or are planning to enter China, we can assist you at this difficult time in different matters by providing you with various outsourced and tailor-made solutions regarding accounting, tax and HR. Our aim is to offer services at the best value for money, to make procedures faster and to make sure that your enterprise complies with local standards in China.

The original article is availabe here.

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