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Chinese authorities label ‘996’ work arrangements as illegal

Written by Jiaxing Li Published on     3 mins read

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Regulators say excessive work harms “social stability” and widens the wealth gap.

The prevalent “996” work schedule adopted by tech companies was the target in a lengthy set of guidelines published by the Supreme People’s Court and Ministry of Human Resources and Social Security on Thursday. The arrangement—working from 9:00 a.m. to 9:00 p.m., at least six days a week—was defined as illegal in the detailed warning against China’s major corporations.

The article included mentions of ten labor dispute cases, one of which involved an employment contract where “996” work hours were part of the employment agreement. The court ruled that the contract was invalid as it violated labor regulations that specify the maximum work hours for staff. In another case, a tech company asked an employee to sign an agreement to forfeit overtime pay. The court ruled this contract unlawful.

China’s labor law states that the standard work period is eight hours a day, with a maximum of 44 work hours per week. By law, any work performed beyond that time frame requires overtime pay.

However, many tech companies in China do not issue overtime compensation. A current Tencent employee confirmed with KrASIA that the company does not provide overtime pay, but does cover transportation and meal expenses for staff members who work late.

“Everyone is used to working excessively, so we don’t even think about the fact that it’s illegal,” another Tencent employee in Shenzhen told KrASIA.

In an article published on Friday, state-run tabloid Global Times commented that overtime work affects the harmony of labor relations and social stability. It further stated that achieving “common prosperity” and redistributing wealth in the country are national priorities.

China’s wealth inequality has risen steadily since the late 1970s and early 1980s, when the country began its transition to a market economy, according to the latest report published by the Credit Suisse Research Institute in June. China had 5.3 million millionaires in 2020, the second-highest in the world, and the number is expected to nearly double by 2025.

China’s ruling party last week stated in an article that a huge wealth gap is unacceptable, and that the government must act to regulate the market and ensure wealth is redistributed. The digital economy is booming and major tech companies and their investors hold a large portion of wealth within the country, the article said, “but everyone should be rewarded based on the contribution they’ve made to society.”

To protect gig workers like ride-hailing drivers and delivery riders, the government ruled that companies must pay them higher wages and offer insurance.

Internet giants have been the targets of a slew of tightening regulations. Many are toeing the new line to avoid further fallout. Companies like Meituan, Tencent, and Alibaba have been pouring financial resources into charitable programs in recent months to realize “common prosperity.”

E-commerce firm JD.com said it has signed formal employment contracts with nearly 300,000 couriers in its most recent financial report. Similarly, group-buying app Pinduoduo said it will apply its technology to modernize China’s agriculture and boost the development of rural communities in its latest financial result release.

Read this: What’s behind China’s “996” overwork culture?

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