China Increases Public Holiday Entitlement

On 12 November 2024, China announced an update to the Regulation on Public Holidays for National Annual Festivals and Memorials Days, increasing the public holiday entitlement from 11 to 13 days, starting from 2025. The newly added public holidays are Chinese Lunar New Year's Eve to celebrate Spring Festival, as well as 2 May to celebrate Labour Day.

Normally, the Chinese government publishes specific holiday arrangements annually, rearranging working days around the public holidays to allow  employees to take several days off in a row.

As a result of the increase in public holiday entitlement, employers in China should be aware of the following points:

• Just like other public holidays, overtime shall be payable at a rate of 300% of the employee's daily wages if the employee is arranged to work on Lunar New Year's Eve or 2 May. This applies  not only to employees working under the standard working hours system but also those who are working under the special working hours system in some provinces/cities.
• The average number of working days in a month will change because when making this calculation, the weekends and public holidays are excluded. In light of the change, items calculated based on the average number of working days will be impacted accordingly. For example, the standard working hours for specific calculation cycles implemented for employees working under the comprehensive working hours system, as well as the medical treatment period entitlement applicable to employees in Shanghai. More detailed guidance on these items is expected in the near future.
• The number of working days used to calculate average daily wages shall remain unchanged because the number of public holidays is not required to be excluded when calculating the average daily wages. Therefore, overtime payment, compensation for unused annual leave, etc. that are calculated on the basis of average daily wages shall remain the same.
• The employee handbook or standalone holiday policy that specifies the public holiday entitlement will need to be updated accordingly.