January 2023
Yanting Pei and Teresa Huang
On December 26, 2022, the National Health Commission (hereinafter referred to as the “NHC”) issued an announcement renaming the Chinese term for COVID-19 from “novel coronavirus pneumonia” to “novel coronavirus infection”, and the Joint Prevention and Control Mechanism for COVID-19 under the State Council issued the Overall Plan on Managing the Novel Coronavirus Infection (COVID-19) with Measures against Class B Infectious Diseases (hereinafter referred to as the “Overall Plan”), which stipulate that the measures for prevention and control of Class A infectious diseases under the Law of the People’s Republic of China on Prevention and Treatment of Infectious Diseases taken for managing the novel coronavirus infection will be lifted as of January 8, 2023. Although enterprises no longer need to be troubled by the issue of wage payment during the quarantine period in this context, it does not mean that enterprises can no longer take the epidemic into consideration in their employment management. Therefore, this article briefly analyzes some of the issues that enterprises may face next.
I. What is the nature of the period of self-care at home for infected persons?
As the Overall Plan has cancelled the compulsory quarantine measures for infected persons and close contacts, enterprises are no longer obligated to pay wages in such cases. However, the Overall Plan mentions that patients with mild symptom shall be treated with self-care at home among the measures for graded and classified treatment of patients, so it can be understood that the period of self-care at home for infected persons is also a way to receive treatment. If an employee can indeed prove that he or she is infected, it is recommended that his or her employer accepts the employee’s application for sick leave. If an enterprise overemphasizes that a sick-leave certificate issued by a hospital doctor is required for granting sick leave, it is not conducive to resolving labor-management conflicts, but also increases the burden on doctors and exhausts the limited medical resources available. If an enterprise actually terminates the labor contract with an employee for this reason, the defense of serious violation of its rules and regulations raised by the enterprise may not be very convincing when it is finally before the court[1].
On the other hand, if an employee with mild symptom is able to work, his or her employer may adjust the employee’s way of working by telecommuting or working from home based on the actual situation to avoid any “positive” employee returning to work as much as possible. According to the rules of conduct for infected persons stipulated in the Guidelines for Personal Protection under the Class B Management for COVIDE-19 Infection issued by the NHC, infected persons shall refrain from going out unless necessary and avoid going to crowded public places, and shall not participate in gatherings. If going out cannot be avoided, he or she shall wear an N95 or KN95 mask throughout the whole time. According to the Guidelines for Prevention and Control of the COVID-19 Infection in Key Populations, Key Institutions and Key Places under Class B Management, enterprises are required to effectively implement the prevention and control measures in their offices, and may require “positive” employees to work from home, or reduce contact with others if it is necessary for a “positive” employee to work at office (see point 5 of this article for details). Therefore, it is recommended that enterprises avoid arranging “positive” employees to work with uninfected employees at the same time.
As for the payment of sick leave wages, the calculation of sick leave wages may vary from region to region, and enterprises may pay sick leave wages in accordance with the relevant local regulations and need to pay attention to whether the minimum payment limit is met. According to the Notice of Shanghai Municipal Labour and Social Security Bureau on the Calculation of Sick Leave Wages, the minimum sick leave wage shall not be less than 80% of the minimum wage standard of Shanghai Municipality. Moreover, there are similar regulations in other regions. For example, the Regulation of Beijing Municipality on Payment of Wages (Revised in 2007) also stipulates that the employer shall not pay sick leave wages less than 80% of the minimum wage standard of Beijing Municipality.
In addition, if the termination or rescission of an employment contract is involved, attention should be paid to the application of the medical treatment period.
II. Is it possible to force an employee to take annual leave in preference?
If an enterprise really wants to reduce costs and the employee concerned has annual leave unused, according to Article 5 of the Regulation on Paid Annual Leave for Employees, the enterprise may arrange its employees to take annual leave with an overall consideration. On the other hand, if the employee has taken sick leave for specified long period, his or her annual leave for that year may be cancelled in accordance with Article 4 of the Regulation on Paid Annual Leave for Employees.
III. Is it possible to force an employee to handle his or her work during sick leave?
As Article 3 of the Labor Law stipulates that employees have the right to take rests and have holidays and leaves, if an employee has fulfilled the formalities obligations of applying for sick leave in accordance with the relevant regulations, in principle, the employee has the right to refuse to work during sick leave. However, in case of an emergency, it is recommended that both parties negotiate to maximize their respective interests.
IV. Can an employee refuse to work because “the employer cannot provide a safe working environment”?
According to the Opinions on Stabilizing Labor Relations and Supporting Enterprises to Resume Work and Production during the Prevention and Control of COVID-19 Infection (Issuance No. 8 [2020] of the Ministry of Human Resources and Social Security)[2], if an enterprise has indeed provided the necessary epidemic prevention protection and labor protection measures, but any of its employees still refuses to return to work without justifiable reasons, the enterprise may deal with this in accordance with the law. That is, if the enterprise has the corresponding rules and regulations regarding absenteeism or refusal to attend work, the violator may be dealt with in accordance with such rules and regulations.
According to the FAQs of the Shanghai High People’s Court and the Shanghai Municipal Human Resources and Social Security Bureau on Handling Epidemic-related Employment Disputes, if an employer makes proper and reasonable work arrangements such as working from home or telecommuting and does not infringe upon the legitimate rights and interests of its employees, if any of its employees proposes to terminate the labor contract on the ground that the employer has not provided the labor conditions as agreed in the labor contract and requires the employer to pay compensation, such employee shall not be supported. Therefore, if an employee refuses to return to work even though his or her employer can provide practical epidemic prevention protection and labor protection measures, it is less likely that the employee will receive judicial support at this time.
V. What are the legal obligations of an employer under the circumstance of Class B management?
Although the NHC has renamed the Chinese term of COVID-19 from “novel coronavirus pneumonia” to “novel coronavirus infection” and the Joint Prevention and Control Mechanism for COVID-19 under the State Council has issued the Overall Plan on Managing the Novel Coronavirus Infection with Measures against Class B Infectious Diseases, what remains the same is that COVID-19 is still an infectious disease and enterprises are still obligated to prevent and control the epidemic. According to the Guidelines for Prevention and Control of the COVID-19 Infection in Key Populations, Key Institutions and Key Places under Class B Management by the NHC, enterprises, as the main body of epidemic prevention and control, are required to undertake the following epidemic prevention and control obligations:
1. To earnestly fulfill the responsibility of epidemic prevention and control as the responsible party, and effectively respond to the epidemic during the outbreak thereof.
2. To raise employees’ awareness of self-protection, ventilate offices, canteens, bathrooms, etc.; strengthen the monitoring of employees’ symptoms; promptly conduct antigen or PCR tests for employees with symptoms such as fever, dry cough, weakness and sore throat, and allow “positive” employees to work from home; if a “positive” employee needs to work at office, he or she shall take suitable personal protection measures and reduce contact with others.
3. Where the outbreak of the epidemic is serious, to cancel offline gathering activities such as meetings and trainings, or reduce the number of participants and take suitable personal protection measures if an offline gathering must be held; and to take measures such as flexible work system, staggered work hours, working from home if necessary, controlling the number of employees working at office, and not providing eat-in meals.
4. To establish a system of job rotation and backup for employees in key positions and key procedures, and to require employees to commute directly between home and office in principle when the epidemic is serious so as to minimize the impact of the epidemic on the normal operations of the enterprise.
VI. How should wages be paid before January 8, 2023?
It is worth noting that the starting date for lifting the control measures for the COVID-19 infection is January 8, 2023, before which enterprises should deal with quarantine and wage payment issues in accordance with the established regulations, i.e. the provisions related to the Notice on Further Optimizing the Implementation of COVID-19 Prevention and Control Measures issued by the Joint Prevention and Control Mechanism for COVID-19 under the State Council on December 7, 2022 (hereinafter referred to as the ” Ten New Measures”), specifically:
1. Is the home quarantine still a compulsory quarantine under the “Ten New Measures”?
Although the “Ten New Measures” has changed the previous compulsory centralized quarantine measures, and does not stipulate the mandatory requirements on the PCR testing and the examination of “health code,” the question of whether or not normal wages should be paid is whether the “Ten New Measures” has changed the nature of COVID-19 as an infectious disease, and changed the mandatory requirement on “quarantine”. According to the full text of the “Ten New Measures”, it does not deny the nature of COVID-19 as a Class A infectious disease, nor does it define COVID-19 as common cold symptoms. Moreover, according to Article 3 of the “Ten New Measures”, home quarantine is only one of the current quarantine methods for infected persons with mild symptom, and the home quarantine period and the conditions for release from quarantine have been set forth therein. In addition, the announcement issued on December 26, 2022 proves, as a negative proof, that the previous control measures are prevention and control measures for Class A infectious diseases. Thus, the home quarantine under the “Ten New Measures” should belong to the “quarantine measures” provided for in Article 41 of the Law on Prevention and Treatment of Infectious Diseases[3].
2. Payment of wages of “positive” employees during the quarantine period
In view of the above analysis, although the “Ten New Measures” does not address the issue of wage payment, if any “positive” employee is unable to provide normal labor due to COVID-19 infection, his or her employer shall pay wages to him or her according to the normal wage rate for the quarantine period in accordance with the Notice by the General Office of the Ministry of Human Resources and Social Security of Issues Concerning Properly Handling Labor Relations during the Prevention and Control of the Outbreak of Novel Coronavirus Pneumonia (COVID-19) (Fa-Ming-Dian No. 5 [2020] of the General Office of the Ministry of Human Resources and Social Security), the Opinions on Stabilizing Labor Relations and Supporting Enterprises to Resume Work and Production during the Prevention and Control of COVID-19 (Issuance No. 8 [2020] of the Ministry of Human Resources and Social Security), and the local policies on the payment of wages during COVID-19.
Given that the “Ten New Measures” has clarified the period of quarantine and the criteria for release from quarantine, if an employer needs to consider the cost, it may require employees undergoing quarantine to provide appropriate evidence to prove the specific dates of quarantine according to the criteria. If an employee undergoing quarantine still wants to continue to rest after “turning negative”, the employer may require the employee to submit a sick leave application according to the above-mentioned provisions, which will be handled in accordance with the local regulations on sick leave pay and medical period. However, after January 8, 2023, if an infected employee still has not recovered at that time, his or her employer may directly require the employee to take sick leave or work from home office, etc.
3. Payment of wages of employees living with their “positive” families
As COVID-19 remains a Class B infectious disease but subject to the prevention and control measures for a Class A infectious disease before January 8, 2023, close contacts shall be subject to control. If a family member of an employee living with the employee is diagnosed as infected in this period, the employee should be a close contact. According to the “Ten New Measures”, a close contact shall undergo a self-quarantine for five days. Therefore, the employer of the employee should pay the normal wages to the employee in accordance with the Fa-Ming-Dian No. 5 [2020] of the General Office of the Ministry of Human Resources and Social Security and the Issuance No. 8 [2020] of the Ministry of Human Resources and Social Security mentioned above and the relevant local regulations.
4. Is it possible to force a “positive” employee to work during the quarantine period?
According to Article 41 of the Law on Prevention and Treatment of Infectious Diseases, the Fa-Ming-Dian No. 5 [2020] of the General Office of the Ministry of Human Resources and Social Security and the Issuance No. 8 [2020] of the Ministry of Human Resources and Social Security, the normal payment of wages to employees who are legally quarantined is an unconditional requirement. Thus, whether a “positive” employee provide labor or not, his or her employer should pay wages to him or her as usual. On the other hand, Article 3 of the Labor Law stipulates that laborers have the right to take rests and have holidays and leaves. If an employee really needs treatment after “turning negative” and has fulfilled the formalities of applying for sick leave in accordance with the relevant regulations, his or her employer cannot refuse the employee’s application.
5. Is it possible to force an employee to take annual leave?
As analyzed above, before January 8, 2023, it is a legal requirement for an employee diagnosed as infected or identified as a close contact to undergo quarantine, and it is a legal obligation for his or her employer to pay normal wages accordingly. Therefore, if an employee undergoes quarantine measures before January 8, 2023 due to being diagnosed as infected or identified as a close contact, his or her employer cannot force the employee to take annual leave.
In short, as the Overall Plan also points out that the shift should be made in an orderly manner, before the COVID-19 infection is completely excluded from infectious diseases, enterprises still need to pay attention to their own responsibility for epidemic prevention and control to avoid compliance risks.
[1] As in Case No. 3 of the Second Group of Model Cases of Labor and Personnel Disputes jointly issued by the Ministry of Human Resources and Social Security and the Supreme People’s Court (Letter No. 90 [2021] of the Ministry of Human Resources and Social Security), although the employee failed to fulfill the formalities for applying for overtime work, but overtime work indeed occurred, therefore the court upheld his claim for overtime pay. The court pointed out in the Typical Significance that although an enterprise needs to implement management in accordance with its rules and regulations, it shall not take advantage of its superiority to abuse the rules and regulations. Similarly, if an employee is indeed infected and applies for sick leave, and his or her employer rejects it on the ground that the application does not conform to the process, the employer is suspected of abusing its rules and regulations.
[2] (III) Guiding and regulating the management of employment. During the period of epidemic prevention and control, the related parties shall guide enterprises to fully understand the situation of employees being subject to quarantine measures or emergency measures taken by the government, and require enterprises not to terminate the employment contract of any employee who cannot provide normal labor due to being affected by the relevant measures or return the relevant dispatched employees during this period. For reopened enterprises that meet the relevant requirements, the related parties shall guide the enterprises to provide the necessary epidemic prevention protection and labor protection measures and actively mobilize employees to return to work. For employees who are unwilling to return to work, the related parties shall guide the labor unions of the enterprises to promptly explain the policy requirements of epidemic prevention and control and the importance of enterprises’ resuming operations, and take the initiative to persuade employees to return to work in a timely manner. For those who refuse to return to work after persuasion or for other non-legitimate reasons, the related parties shall guide the enterprises to deal with them in accordance with the law. The related parties shall encourage enterprises to actively explore ways and means to stabilize employment relations. For enterprises that still need to lay off employees after taking corresponding measures, the related parties shall guide them to formulate layoff plans, fulfill relevant procedures in accordance with the law, properly handle labor relations, and maintain normal production and operation order of enterprises.
[3] Article 41 of the Law on Prevention and Treatment of Infectious Diseases stipulates that “With respect to the places where there are cases of Class A infectious diseases or to the persons in the special areas within such places, the local people’s governments at or above the county level where the above places are located may carry out quarantine measures and, at the same time, report the matter to the people’s governments at the next higher level; and upon receiving such report, the people’s governments at the higher level shall immediately make a decision on whether to approve the measures or not. Where the people’s governments at the higher level decide not to approve the measures, the people’s governments that have taken quarantine measures shall immediately withdraw such measures. During the period of quarantine, the people’s governments that take quarantine measures shall guarantee the daily necessities of the persons under quarantine; and if such persons have their own employers, the employers, which they belong to, shall not stop the payment of their wages during the period of quarantine. Withdrawal of quarantine measures shall be subject to decision and announcement by the authority that originally makes the decision to take the measures.”
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