How do Chinese employees get paid for February when they didn’t work?

Jennifer Pak Apr 1, 2020
Workers in Shanghai are back on the roads as the Chinese economy tries to gear up again. Charles Zhang/Marketplace

How do Chinese employees get paid for February when they didn’t work?

Jennifer Pak Apr 1, 2020
Workers in Shanghai are back on the roads as the Chinese economy tries to gear up again. Charles Zhang/Marketplace

Huang Xiangyun chats with her colleagues at a clothing store in the suburbs of Shanghai. She is happy to be back at work.

In January, Huang was in central Anhui province visiting her family for the Lunar New Year when people across the country were forced to stay indoors to prevent the spread of the COVID-19 virus.

Huang was unable to leave her in-law’s home for 20 days.

“Some officials dug a big hole in our roads so no cars could enter the village. We could go grocery shopping, but we avoided that if we could,” Huang said. “My father-in-law organized volunteers to buy the stuff villagers needed.”

At the same time, the company she works for in Shanghai wasn’t able to open.

Huang was out of work for 40 days, which was tough because most of her salary comes from commissions.

Across China, a lot of workers get paid monthly and are just receiving their pay for February, when most businesses in the country were shut.

Last month, the unemployment rate in China’s urban areas soared to its highest, 6.2%, but those who still have a job are by law supposed to receive their regular salaries.

Huang’s colleague He Jie heard the company will pay them for February, but there was a catch.

Huang Xiangyun (left) and He Jie (right) resumed work on March 9th after 40 days of not working. (Charles Zhang/Marketplace)
Huang Xiangyun, left and He Jie resumed work on March 9 after 40 days of not working. (Charles Zhang/Marketplace)

“The plan was to give us our base salary, and then we’d have to work overtime to make up for the pay,” said He, who has been working with the clothing company for seven years.

She said she and the other staff protested and the idea was shelved.

She, too, was in Anhui province visiting her parents’ village for the holidays when the stay-at-home orders came down.

“I basically didn’t leave my parents’ home for a month. I played on my cellphone, watched [short videos on TikTok’s Chinese cousin] Douyin and read news about the coronavirus,” she said.

In another village in southern Anhui province, Zhu Ran was filled with anxiety about COVID-19.

“I couldn’t see the coronavirus, so I thought it would be everywhere if I stepped outside,” Zhu said. “I did not see a stranger for a few weeks.”

He was so preoccupied about contracting COVID-19 that he didn’t worry about whether his job at a local flight data company was secure, even though U.S. airlines and other carriers cut flights to and from China in February.

“At first I thought the economic impact would be short term. Besides, they’ll still need people to work after the epidemic ends,” he said.

Zhu thought the worst-case scenario would be his company putting him on unpaid leave for two month. He felt he could handle that because, like most Chinese citizens, he has large savings.

“My wife and I put aside some 60% of our salaries every month,” he said. “But then the worst thing happened.”

In late February, he got laid off, which was a big blow. But then, a week later, he found a job in public relations.

“This job pays 30% more than my previous job,” Zhu said.

In Guangdong province, which is part of China’s manufacturing belt, Tai Hongling has been back at the shoe factory since late February.

Zhu Ran lost his job after the COVID-19 outbreak. He is grateful that he had huge savings. (Charles Zhang/Marketplace)
Zhu Ran lost his job after the COVID-19 outbreak. He is grateful he has huge savings. (Charles Zhang/Marketplace)

She makes minimum wage but can more than double that with overtime and bonuses.

Trouble is, Tai said, not many orders are coming in from her factory’s main market, the United States.

“Yes, I still have work [for now] but there is no overtime,” Tai said. “My pay will be very low.”

On top of that, there are rumors of possible layoffs.

“The rumor is that factories in the area plan to lay off workers 50 years or older at the end of this month.”

Tai is not 50 yet, but she’s close. She said she needs to stay at her current factory job for two more years before she qualifies for a pension.

So far, she has not received a layoff notice.

Back in Shanghai, clothes sellers He and Huang went back to work on March 9, but ever since, they have been very careful about their spending.

“Before the [coronavirus,] I would order 30 yuan [$4] lunches, but now I spend only about half that amount,” He said.

He has also changed her shopping habits.

“I used to spend about 2,000 yuan [$280] to 3,000 yuan [($420] a month on shopping. I would go with my friends and colleagues and we’d eat out, but now we don’t do that.”

Two days after she and Huang spoke to Marketplace, they got paid.

They each received 2480 yuan [$350], which is the minimum wage in Shanghai.

“I’m happy! Excited! Thrilled! I was worried we wouldn’t even get that much since the company is in a difficult spot,” He said. “It’s better than I anticipated!”

He Jie (left) and Huang Xiangyun (right) have scaled back on their own spending now that their take-home pay at the clothing store will be a lot lower than before the coronavirus. (Charles Zhang/Marketplace)
He Jie, left, and Huang Xiangyun have scaled back on their spending now that their take-home pay at the clothing store will be a lot lower than before the coronavirus. (Charles Zhang/Marketplace)

Her colleague Huang is also happy.

“We didn’t work the month of February. To get the minimum wage is really good,” she said. “It’s so common for private companies to not pay employees in this situation.”

Now, Huang can cover most expenses for the month. That’s no small relief since her husband didn’t have much work these past two months and will have little or no pay.

Huang’s husband installs home appliances.

Together they send money back to the village where their parents are taking care of their two children, ages 9 and 11.

Tough times lie ahead. Huang and He said there are far fewer customers coming into the clothing store.

“People are still following protection measures against the coronavirus and fewer people are out shopping,” He said.

At 27, she is optimistic that the company she works for, which is listed on the Shanghai stock exchange, will pull through the pandemic.

Her advice to Americans who are now grappling with the impact of the coronavirus is to follow the social distancing rules and stay positive.

“We’ve got both arms and legs that work. Even if we lose our jobs, once the pandemic passes, we can start again and find an even better job,” He said.

Additional research by Charles Zhang.

COVID-19 Economy FAQs

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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