With China downgrading the COVID-19 management to Class B infectious disease, companies will also need to update their employee management protocols to cope with the new situation. Our professionals at Dezan Shira & Associates looked into some common issues that companies may come across in the coming weeks, including salary payment, sick leave management, contract renewal, termination, and so on. For more information or assistance, please contact Fuki Fu, Manager of Human Resources and Payroll Services at Dezan Shira & Associates Shanghai Branch.
On December 26, 2022, China’s National Health Commission (NHC), a cabinet-level executive department of the State Council that is responsible for formulating national health policies, announced that the official name for COVID-19, the “novel coronavirus pneumonia”, will be changed to the “novel coronavirus infection” (COVID-19 infections), and preventive and control measures for a Class B infectious disease will be applied to COVID-19 infections, starting from January 8, 2023.
Previously, novel coronavirus pneumonia was classified as a Class B infectious disease, but was subject to the prevention and control measures of a Class A infectious disease, as stipulated in the Law of the People’s Republic of China on the Prevention and Treatment of Infectious Diseases.
The downgrade of COVID-19 management means that China has finally decided to remove some of its most stringent travel restriction measures, a move that has been long-awaited by business groups. On the other hand, the policy shift shall also affect businesses’ employee management practices, such as salary payment and sick leave management.
In this article, we look into some employee management issues that companies may come across after January 8, 2023.
1. How should companies pay employees who are infected with COVID-19 and cannot work?
Previously, people who must undergo quarantine as a result of COVID-19 (either because they were infected, were a close contact, or lived in an area where positive cases had been discovered) can continue to get their normal salary during this period, as according to Article 41 of the Law on the Prevention and Treatment of Infectious Diseases stipulates:
- “With respect to the places where there are cases of infectious diseases under Class A 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 isolation (quarantine) measures […]
- During the period of isolation […] if such persons have their own units, the units, which they belong to, shall not stop the payment of their wages during the period of isolation.”
However, with COVID-19 being downgraded to Class B infectious disease management, people infected with COVID-19 will no longer be subject to quarantine, and the article above will no longer be applicable.
Instead, starting from January 8, 2023, if an employee is infected with COVID-19 and cannot work, the company should treat the employee’s absence as sick leave and pay the employee according to sick leave wages standards.
There are no national standards for sick leave wages and the regulations on recuperation period are made at the local level. But in general, sick leave wages should be no less than 80 percent of the local minimum wage standard according to Opinions on Several Issues concerning the Implementation of the Labor Law of the People’s Republic of China [Lao Bu Fa [1995] No. 309].
2. Do companies have to grant sick leave to all employees infected with COVID-19?
Not really. Three years after the first outbreak of the COVID-19 pandemic, the symptoms of COVID-19 infection have been much milder than before. For people with mild symptoms or even no symptoms, they may not need to stop working and rest.
If infected employees need to take rest or get medical treatment, they will have to go through the sick leave application procedure of the company, rather than obtain the sick leave treatment automatically.
To be noted, however, amid the first wave of COVID-19 cases surging in China, companies are advised to keep their sick leave procedures a bit more flexible. With all-level hospitals filled with patients in more critical situations, it’s not very proper to ask all employees to provide medical treatment proof to obtain sick leave, even if it is so stipulated in their company rulebook. As long as employees can provide reasonable evidence (such as a picture of the employee with an antigen test result), companies are suggested to grant sick leave to prevent unnecessary conflicts and labor disputes.
3. Will employees infected with COVID-19 automatically be granted repercussion period (医疗期)?
Not really. As introduced above, symptoms of COVID-19 infections now vary from one to another. Employees with minor symptoms or no symptoms can continue working or come back to work after a few days of sick leave.
Repercussion period, or medical treatment period, which usually ranges from three months to 24 months based on the cumulative years of working of the employee, is a special type of sick leave in which the employer cannot terminate the employee suffering from non-occupational sickness or injury and is responsible for paying a proportion of salary by law.
If employees infected with COVID-19 want to enjoy repercussion period treatment, they need to properly prove their symptoms are serious enough that they cannot provide work and they have to get medical treatment. If the employee cannot provide hospital diagnosis, the employer may confirm the employee’s situation in alternative ways, such as asking employee to provide screenshots of online medical consulting records.
4. Will COVID-19 infection be considered a “work-related injury”?
The Notice on Relevant Security Issues of Medical Care and Related Workers Infected with Novel Coronavirus Pneumonia Due to Their Job Duties (RSBH [2020] No. 11) stipulates that medical staff and other frontline staff who get infected with “COVID-19 pneumonia” while carrying out COVID-19 prevention and treatment duties should be considered as having work-related injuries. They will be entitled to certain legal benefits should they contract COVID-19. Especially for those who died of COVID-19 pneumonia, being recognized as “work-related injury” means the family of the employee can get bigger compensation.
However, with the downgrade of COVID-19 management and the name changing from “novel coronavirus pneumonia” to “novel coronavirus infection”, this legal basis to classify COVID-19 infections for frontline staff as a work-related injury will no longer be applicable after January 8, 2023.
That is to say, COVID-19 infections will no longer be recognized as “work-related injury”, except for death occurring within 48 hours of sudden illness during working hours and at work occasions, as stipulated in Article 15 of the Regulation of Work-Related Injury Insurance.
5. Should companies extend labor contracts for employees with COVID-19 infections?
Article 45 of the Labor Contract Law stipulates that if a labor contract expires under a set of specified circumstances, the labor contract shall be extended until the corresponding circumstances end. One of the specified circumstances is “illness or non-occupational injury within the prescribed repercussion period” as stipulated in Article 42 of the Labor Contract Law.
That is to say, companies indeed should extend labor contracts for employees with COVID-19 infections if their symptoms are serious enough that they have to stop working for medical treatment. For employees who are not qualified to enjoy the repercussion period, the company is not obliged to extend labor contracts for them.
In this circumstance, the economic burden of companies could be alleviated a bit as they can save certain social insurance costs and salary payments for terminating the expired labor contract in time.
6. Can companies terminate labor contracts with employees infected with COVID-19?
Previously, the Notice on Properly Handling Labor Relations Issues during the Prevention and control of the Novel Coronavirus Pneumonia Epidemic issued by the MHRRS made it clear that enterprises shall not terminate the labor contract in accordance with Article 40 and Article 41 of the Labor Contract Law with employees who are COVID-19 patients, suspected patients, or close contacts of confirmed cases. That is to say, companies cannot terminate such employees on the basis of 30 days’ notice (Article 40) or mass layoff (Article 41).
Now, as long as employees are not those who are qualified to enjoy the repercussion period treatment introduced in previous sections, they shall no longer enjoy special protection. That is to say, companies can terminate relevant employees based on all legal grounds, including Article 40 and Article 41 of the Labor Contract Law.
7. Can companies ask employees with COVID-19 infections not to come to working place?
As COVID-19 infections will no longer be subject to the prevention and control measures of a Class A infectious disease and no longer be included in the administration of quarantinable infectious diseases as stipulated in the Border Health and Quarantine Law of the People’s Republic of China starting from January 8, 2023, for employees who are infected with COVID-19 but would like to work normally, companies cannot prevent them from work but can arrange such employees to work from home based on mutual agreement.
Returning to normality
China is endeavoring to shift to “living with COVID” and return to normal, so should the business activities and employee management practices.
Many companies developed special employee management procedures in the past three years. With the downgrade of COVID-19 management to a class B infectious disease, such special employee management procedures may no longer be applicable.
Companies should therefore adjust their employee management rules and procedures to cope with China’s new COVID-19 playbook.
To do this, companies are especially advised to:
- review their current rules and procedures with the help of professionals to ensure they are not violating any regulations;
- standardize their sick leave policy, such as specifying the conditions for sick leave, the required materials to be submitted, and the leave application process;
- standardize measures for tackling violations to company rules such as absenteeism;
- improve the processes for formulating company rules and regulations.
Note: This article is based on the laws and regulations at the time of writing. We’ll keep monitoring regulatory updates on issues introduced in the article. For professional advice or assistance with employee management, please contact us at China@dezshira.com.
About Us
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
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