The recent death of a young employee from an e-commerce company has re-ignited scrutiny of brutal work schedules in the Chinese tech industry, attracted massive public criticism, and initiated a labor probe from local regulators. Global employers need to understand China’s overtime regulations and potential implications to alleviate the risk of brand disparagement and noncompliance with the law.
Social Movements Against “996” Reignited. In 2019, an
online protest by Chinese tech workers against GitHub erupted over the commonly used “996” schedule in the nation’s tech industry. The “996” regimen” encouraged and expected new tech employees to work demanding shifts from 9 a.m. to 9 p.m., plus overtime, for six days a week without extra pay.
The latest “996” protests come at a time when Chinese internet companies are aggressively expanding community-buying businesses. Pinduoduo, a major e-commerce retailer among emerging tech businesses, recently had a 22-year-old employee who reportedly died from overwork due to the company’s harsh working schedules. The company provides a popular service, which has peaked due to the coronavirus pandemic, and allows neighbors to purchase groceries and fresh produce in bulk at discounted prices online. After the death of the employee, the company has suffered enormous backlash and seen a sudden stock plunge after not acknowledging or apologizing for the tragedy.
Possible Labor Probe and Changing Attitude from Chinese State Media. The 996 schedule is technically illegal under China’s labor law, which limits the number of overtime hours for employees and requires overtime pay. However, the de facto application of 996 had been met with little official resistance or enforcement in China, without authorities acknowledging the problem – until now.
Shanghai labor regulators recently stated they had sent a team to investigate Pinduoduo’s labor contracts and work hours. Meanwhile, China’s official Xinhua News Agency denounced the company’s practice for breaking the law in encouraging overwork.
In a significant and symbolic move, the ruling Communist Party’s flagship People’s Daily newspaper commented that it was unfair of dictatorial managers to demand excessive overtime.
The change in attitude may be attributed to concerns that a massive negative public reaction could disrupt the social “harmony”, and the Chinese government desires tighter control of its private tech companies after recent conflict with Jack Ma and his Ant group.
Global Employers need to understand the Current Overtime Regulations and Compliance. Under China’s Labor Law, the amount of overtime is limited to no more than 3 hours per regular workday and no more than 36 hours per month. There are also different amounts of overtime pay depending on when the employees work.
Global companies thus far have remained inconspicuous from public view on this issue. However, with wider scrutiny on working hours, there is an increased chance of being targeted by the local and national labor law enforcement groups; it will only take one disgruntled employee’s social media post to cast the whole company under the spotlight.
Conclusion: CHROs and HR Executives in China need to be wary of this development, understand the company’s formal and informal practices on overtime management, review and update employees’ contracts if needed, to ensure the compliance of the law. It is also helpful to nurture a company culture that promote employees’ mental and physical health. HR Policy Global will monitor the evolvement and update any significant changes.