New Jiangsu guideline requires triple annual leave compensation

Employees in Jiangsu province who ask for compensation when annual leave has not been arranged will find support from the province’s Higher People's Court.

The court has issued a new guideline requiring employers to compensate with 300 percent of the employee’s daily wage income if annual leave has not been arranged.

The new guideline is in accordance with regulations including the Labor Contract Law of the People's Republic of China, according to the report.

The aim is to fully implement the paid annual leave system and protect the rights of workers, which would in turn promote long-term development of domestic enterprises.

Courts in Jiangsu should accept cases on annual leave payment disputes between laborers and employers in the future, the guideline says.

To avoid possible confusion, the guideline further illustrated several definitions.

The daily wage income of the annual leave compensation is calculated by dividing employee's salaries by payable days per month;

Average monthly salary includes wages, bonus, allowances and other forms of payment, but not overtime pay in the year when annual leave has not been arranged.

The guideline is careful to emphasize if the employer and the employee have agreed on a particular payment standard when annual leave is not arranged, the payment shall follow the original standard, but it should not be lower than the daily wage.

However, if the employer can prove the annual leave has been arranged but the employee hasn’t made it due to his or her own reasons, the court will not support the employee if he or she still asks for compensation.

The guideline has been put into effect, and the previous one is no longer valid in dealing with such disputes.