[China] Shanghai's minimum wage increase takes effect

Shanghai’s minimum wage increase takes effect from April 1 2019, China Briefing reports.

The minimum wage increase takes the statutory full-time minimum wage from RMB2,420 (US$360) monthly to RMB2,480 (US$369). The hourly part-time minimum wage increases from RMB21 (US$3.12) to RMB22 (US$3.27).

This wage rise maintains Shanghai’s place as the highest minimum wage payer in China. Shenzhen comes next with its minimum pay of RMB2,200 (US$328), followed by Beijing at RMB2,120 (US$316).

From February this year, a monthly minimum wage of RMB2,000 (US$298) was exceeded in Shanghai, Beijing, Guangdong, Tianjin, Jiangsu, and Zhejiang.

The minimum wage is a basic wage and excludes social insurance premiums and housing provident fund contributions. Employers must continue to make these for full-time employees.

Also excluded are overtime pay, night shift allowance, summer high-temperature allowance, the special working environment allowance, and subsidies for meals, transportation, and housing.

Employers paying employees hourly do not have to pay social insurance premiums. With the new minimum wage increase, minimum standards for other employee benefits - like overtime pay, subsidies and other allowances - rise too.

At 2.5 percent, the minimum wage increase is less than in past years. The minimum wage is now growing from a larger base but comes at half the rate of growth of the last two years.

However, Shanghai, like Beijing, has updated the minimum wage in line with the high cost of living each year since 2015. Guangdong province and other prosperous regions update minimum wage levels less frequently.

Regional governments in China aim to find a balance between increasing wages for low earners and keeping business costs down.