Understanding and Application of the Comprehensive Working Hour System

Author | Hongyan Law Firm, Attorney Wang Ting

During statutory holidays, families reunite, yet many people still have to stay at their posts due to work. Are employers required to pay overtime wages in such cases? There is no uniform answer; the calculation of overtime pay varies depending on the applicable working-hour system.

At present, China’s full-time working-hour systems are divided into three categories: the standard working-hour system, the comprehensive working-hour system, and the irregular working-hour system. The standard working-hour system is the most widely adopted work-hour arrangement in enterprises and public institutions. However, some job positions are quite unique and do not allow for fixed working hours; therefore, they must adopt special working-hour systems such as the comprehensive working-hour system or the irregular working-hour system.

Today, let’s take a look at how the comprehensive working-hour system is applied in the company’s day-to-day management.

1. Positions eligible for the comprehensive working hour system

comprehensive working hour system is a working hour system that the employing unit needs to arrange employees to work continuously because of the special nature of the work or the restriction of seasons and natural conditions, and cannot implement the standard working hour system. it adopts the working hour system that takes week, month, quarter, year and so on as the cycle to calculate the working time comprehensively.

[Positions Applicable to the Comprehensive Working Hour System]

the employing unit can not adopt the comprehensive calculation of working hours system for the employees at will, and it must comply with the legal provisions.

Article 5 of the Examination and Approval Measures of the Ministry of Labor on the Implementation of Unscheduled Work System and Comprehensive Working Hours System in Enterprises stipulates:

Enterprises may implement a comprehensive working-hour system for employees who meet any of the following conditions, under which working hours are calculated on a cumulative basis over periods such as weeks, months, quarters, or years.

(I) the workers who need continuous operation in the industries of transportation, railway, post and telecommunications, water transportation, aviation, fishery, etc. because of the special nature of their work;

Some employees of (II) geology and resource exploration, construction, salt making, sugar making, tourism and other industries restricted by seasons and natural conditions;

(III) Other employees who are suitable for implementing a comprehensive working-hour calculation system.

Note that there are slight differences in the post regulations applicable to the comprehensive working hours system.

2. the working hours of the comprehensive working hour system

the average daily working time and the average weekly working time under the comprehensive working hour system are basically the same as the legal standard working time.

According to the provisions of the first article of the Notice on the Issue of Annual Average Monthly Working Time and Wage Conversion of Employees, the calculation of working time of the system:

annual working days: 365 days -104 days (rest days)-11 days (legal holidays) = 250 days

Seasonal working days: 250 days ÷ 4 seasons = 62.5 days

Monthly working days: 250 days ÷ 12 months = 20.83 days

Calculation of hours worked: 8 hours per day multiplied by the working day of the month, quarter and year.

Therefore, under the comprehensive working-hour system, the corresponding work-hour standards vary depending on the cycle as follows:

Year cycle: 250 days x 8 hours/day = 2000 hours. During this period, employees should rest for at least 52 days and work overtime for no more than 432 hours.

Seasonal cycle: 62.5 days x 8 hours/day = 500 hours. During this cycle, employees should rest for at least 13 days and work overtime for no more than 108 hours.

Month cycle: 20.83 days x 8 hours/day = 166.64 hours. During this period, employees should rest for at least 4 days and work overtime for no more than 36 hours.

Weekly cycle: 5 days × 8 hours/day = 40 hours. Employees shall have at least one day off during this period.

According to the provisions of Article 5 of the Reply on Issues Related to Working Hours of Employees (No. 271 [1997] issued by the Ministry of Labor), employees who implement the comprehensive working hour system only work more than 8 hours on a certain day in the agreed period, which is not regarded as overtime, but can be paid as usual. However, if the total working hours within the comprehensive calculation period exceed the statutory standard working hours, the excess hours shall be deemed as overtime, and the employer shall pay overtime wages in accordance with the law.

To put it simply, no matter how long the actual working hours of employees are in a certain day, as long as the total working hours do not exceed the standard working hours in the agreed calculation period, it will not be regarded as overtime, unless the employees are arranged to work on legal holidays.

For example

Xiao Li is a bus driver. Because of his special job position, his company adopts a comprehensive working hour system with an annual cycle. For example, if Xiao Li works 190 hours a month, his working time in a year is 2280 hours, which exceeds the legal standard of 2000 hours. Therefore, Xiao Li works 280 hours a year.

How to calculate 3. overtime pay

According to the Regulations on the Payment of Wages and the Opinions on Several Issues Concerning the Implementation of the the People's Republic of China Labor Law (No. 309 [1995] issued by the Ministry of Labor), employees of enterprises who implement the working system of comprehensive calculation of working hours belong to normal work if the working day happens to be a weekly rest day; when the working day happens to be a legal holiday, they are paid according to the standard of the legal holiday.

The part of the comprehensive calculation of working hours exceeding the legal standard working hours shall be regarded as the extension of working hours, and the workers shall be paid the wages for the extension of working hours according to the regulations.

In other words, under the comprehensive working-hour system, there are only two standards for overtime pay: first, overtime pay for extended working hours shall be paid at 150% of the regular wage; second, overtime pay for statutory holidays shall be paid at 300% of the regular wage. Compared with the standard working hour system, there is no 200 per cent overtime calculation standard for overtime on rest days.

In the above small case, if Xiao Li goes to work on legal holidays, the company should pay 3 times of overtime pay according to the number of working days, and 1.5 times of overtime pay for other overtime work.

4. The legal effect of implementing a comprehensive working-hour system without filing.

Article 39 of the Labor Law stipulates: “Where, due to the nature of its production, an enterprise is unable to implement the provisions of Articles 36 and 38 of this Law, it may, with the approval of the labor administrative department, adopt other work and rest arrangements.”

the comprehensive working hour system has its own particularity, so the law stipulates that the implementation of this kind of working hour system by enterprises needs to be reported to the department of human resources and social security for examination and approval. In the actual employment, there are also some enterprises without approval to the staff without the implementation of comprehensive working hours management salary, the effectiveness of this, judicial practice is not conclusive.

In the case of (2018) Lu Min Zai No. 154, the Shandong Higher People's Court held that "the provisions in the labor administrative regulations that the implementation of the comprehensive calculation of working hours should be approved by the labor administrative department are administrative norms and do not belong to the mandatory provisions of effectiveness. Even if a company implements a comprehensive calculation of working hours system for Yang without the approval of the labor administrative department, it does not constitute the cause of invalidation of the labor contract as stipulated in the first paragraph of Article 26 of the the People's Republic of China Labor Contract Law, that is, a company The implementation of the comprehensive calculation of working hours system does not affect the validity of the agreement between the two parties.

And in the case of (2020) Bing 12 Min Zhong No. 181, the court held that "according to the Labor Law and the original Ministry of Labor's" Approval Measures on the Implementation of Irregular Work System and Comprehensive Calculation of Working Hours System in Enterprises ", if an enterprise cannot implement the standard working hours system due to its production characteristics, it can implement the irregular working hours system and the comprehensive calculation of working hours system after approval.

in this case, whether the work position of zhao is in line with the standard of implementing irregular working system must be determined by administrative examination and approval before it can be implemented. A wind power company did not carry out the examination and approval of the irregular working system, that is, the irregular working system was agreed in the labor contract signed with Zhao, which obviously violated the mandatory provisions of the labor law, and the agreement should be invalid.

There is no consensus among judicial tribunals as to whether the requirement that the comprehensive working-hour system be subject to administrative approval constitutes a regulatory norm or an invalidating norm, which can lead to markedly different judicial outcomes. However, current regulations require employers to complete the requisite administrative approval procedures. To mitigate the risk of administrative penalties and legal disputes, it is advisable that, when adopting a comprehensive working-hour system, companies not only clearly agree upon the terms with their employees but also submit the arrangement for approval by the labor administration authority.

What if the comprehensive calculation cycle is not full when the 5. leaves the company

In the comprehensive working hour system mode, as long as the working hours in the agreed period do not exceed the legal standard working hours, even if the actual working hours on a certain day exceed 8 hours, it is not regarded as overtime, and there is no need to pay overtime pay. But if an employee leaves the company for any reason within the comprehensive calculation period, how should their wages be calculated?

In judicial practice, the prevailing view holds that if a comprehensive working-hour system has not yet reached the end of its calculation period and the employment contract is terminated, any portion of an employee’s actual working time in a given period that exceeds the statutory standard working hours for that period should not be regarded as overtime, and the employer is not required to pay overtime wages—unless the employer acknowledges such work as overtime.

There are different ways to deal with the reasons of contract termination in some areas. For example, Article 13 of the (II) of Guiding Opinions on Hearing Labor and Personnel Dispute Cases (November 8, 2011, Su Gao Law Audit Committee [2011] No. 14) of Jiangsu Provincial Higher People's Court and Jiangsu Provincial Labor and Personnel Dispute Arbitration Commission stipulates that the settlement period of comprehensive calculation of working hours is inconsistent with the time of termination and dissolution of labor contract, the time of termination and release is used as the time of the settlement cycle.

When a settlement cycle is not over, the employer rescinded or terminated the labor contract, and the laborer's request to take the actual working time as the settlement cycle to advocate overtime pay should be supported.

The comprehensive working hour system can save the labor cost to some extent, but the employing unit should adopt it in the corresponding position according to the law, and perform the approval procedure with the department of Human Resources and Social Security. If it is abused illegally because of deliberately evading overtime pay, it will not only infringe the employees' right to rest, but also be punished accordingly. To fully safeguard employees’ rights to rest and leave as well as their physical health, enterprises implementing a comprehensive working-hour system shall solicit employees’ opinions and adopt measures such as centralized rest periods, rotating shifts, and compensatory time off to reasonably arrange employees’ work and rest schedules.

Author Profile

Lawyer Wang Ting

Practicing Lawyer of

focuses on civil and commercial legal affairs and corporate legal affairs, and is good at dealing with legal affairs such as contracts, labor disputes and torts, and has rich theoretical research and practical experience.

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Hong Yan lawyer team

the lawyer team of hongyan is composed of lawyer liu hong as the principal and lawyer min na, lawyer chen rui-cheng, lawyer wang ting and lawyer zhou gaofeng as the business backbone. Team members are handsome and have their own advantages. Steady and solid business accomplishment, profound and rich experience; Abide by professional ethics, focus on business practice, unity of knowledge and practice, constant and far-reaching. The

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