1. Establish a real stoppage and its scope
Article 12 of the Interim Provisions on Wage Payment, Lao Bu Fa [1994] No. 489, addresses stoppages not caused by employees. A budget cut, low sales or a manager’s decision to stop assigning one person work does not by itself establish that this rule applies. Record the operational reason, affected entity, site, roles, start date and expected review date. A partial shutdown or selective standby arrangement requires particular care in establishing the facts and applicable local treatment.
Preserve order changes, production schedules, site arrangements and the employee roster. Identify employees who will still handle finance, customer support, maintenance or remote work; they should not simply be grouped with employees receiving no work. This guide concerns temporary business stoppages, not employee misconduct, sick leave or a permanent business closure. Those situations require separate analysis.
2. Protect pay during the first wage-payment cycle
Under national Article 12, wages within one wage-payment cycle are paid at the standard set in the employment contract. Beijing’s Article 27 requires payment as if normal work were provided. Shenzhen’s Article 28 requires normal-working-time wages for a cycle of no more than 30 days, counted from the stoppage date. The Shenzhen rule expressly states that limit; do not treat it as wording found in every city’s rule.
A scheduled payday is not the same as a wage-payment cycle. If a stoppage starts halfway through a payroll month, do not assume that the next payday ends the protected first cycle. Document the cycle, start and end dates, applicable wage components and any split-period calculation under the local rules. Normal-working-time wages are also not automatically identical to the previous month’s total including overtime and special allowances.
3. After that cycle, distinguish work from no work
National Article 12 says that, after one wage-payment cycle, employees providing normal work must receive at least the local minimum wage; where normal work is not provided, the relevant rules must be applied. The minimum is a floor, not an automatic replacement for an existing contractual wage. Beijing’s Article 27 allows a newly agreed pay standard based on the work provided, subject to the city minimum wage. Shenzhen’s Article 28 likewise refers to a newly agreed standard based on the work provided. Verify any agreement and mandatory limits before reducing pay.
For employees to whom the employer assigns no work after the first cycle, Beijing Article 27 sets basic living expenses at no less than 70% of the city minimum wage, subject to other applicable national or municipal rules. Shenzhen Article 28 sets living expenses at no less than 80% of its city minimum wage, until operations resume or the employment relationship ends. These percentages apply to the relevant city minimum-wage standard, not the employee’s original salary. Check the current amount and local calculation rules before payroll; neither percentage is a nationwide rule.
4. Align the notice with what employees actually do
Issue a clear written arrangement covering the reason, affected staff, start date, work or standby duties, pay treatment, payment dates, contact channel and review or return-to-work process. For rules or major decisions directly affecting employee interests, check the discussion, consultation and publication or notification requirements in Labor Contract Law Article 4. Where contractual terms are changed by agreement, Article 35 requires a written change. A receipt acknowledging a notice is not itself consent to a pay cut.
Keep a contemporaneous record of tasks and time actually worked, including instructions from overseas managers. Remote customer calls or recurring reporting duties cannot simply be ignored because the document labels everyone “on standby”. Reassess payment when work resumes or assignments change. Do not relabel an employer-imposed stoppage as an employee’s voluntary unpaid personal leave, or assume that the arrangement automatically ends the employment relationship or social-insurance obligations.
5. Prepare the payroll file and the next decision
Labor Contract Law Article 30 requires timely and full payment on the lawful basis. Business difficulty is not a general licence to defer wages. Beijing Article 26 separately permits a delay of no more than 30 days where temporary inability to pay arises from operational difficulty, after explaining the situation to employees and reaching agreement with the union or employee representatives; a shutdown notice alone does not satisfy those conditions. Persistent non-payment can raise employee termination and compensation issues under Articles 38 and 46.
Before approval, assemble the employment contracts, payroll cycles and components, operational evidence, affected roster, work records, employee communications and a city-specific calculation sheet. Set a review date for resumption, revised arrangements or a separately assessed exit process; a temporary stoppage does not by itself satisfy dismissal or redundancy requirements. For an initial employer enquiry, provide a non-confidential outline of the China entity, city, affected headcount, planned dates, work still required and next payday. Consultations are available in Chinese and English.
Legal sources
Official sources · Checked 2026-10-20. Translations are for reference and are not official legal texts.
- Interim Provisions on Wage Payment, Lao Bu Fa [1994] No. 489 ↗
Articles 6, 7 and 12: payroll records, payment dates and the national framework for non-employee-caused stoppages.
- Beijing Provisions on Wage Payment (2007 amendment) ↗
Articles 9, 26, 27 and 41: payment cycles, conditional payment delay, stoppage pay and the meaning of normal work.
- Shenzhen Regulation on Employee Wage Payment (2025 amendment) ↗
Articles 4, 28 and 29: normal-working-time wages, the first cycle and living expenses; distinguish employee-fault stoppages.
- PRC Labor Contract Law (2012 amendment) ↗
Articles 4, 30, 35, 38, 40–42 and 46: procedures, payment, contract changes and separate termination or redundancy requirements.
General information about mainland China. The facts, applicable dates and local rules require individual review.
Partner, Beijing ChangAn Law Firm
China-qualified since 2019 · Beijing & Shenzhen
Review a China shutdown payroll plan
Check the operational facts, payment cycle, local rules and employee arrangements before approving the payroll instruction.
Discuss your matter ↗