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Suggested wage increase lowered in certain provinces

(chinadaily.com.cn)
Updated: 2009-08-05 18:43

Several provinces or municipalities have lowered their guidelines for wage increases this year in response to the current economic situation, the Chinese-language International Finance News reported Wednesday.

According to a statement post on the website of the Labor and Social Security Department of Guangdong province yesterday, the baseline for companies to increase employees' wages is 7 percent. That is lower than the 10 to 15 percent set last year.

The statement also says enterprises should not increase their staff's wages by more than 12 percent to avoid rising labor costs. If necessary, enterprises can also maintain or even decrease their employees’ wages, but not below the minimum legal level.

The labor authority in Qinghai province suggested a 9 percent increase, down from 13 percent last year, while Shanxi province proposed 12 percent, two percentage points lower than 2008.

Analysts say the guidelines only serve as reference points, and note that actual wages are determined by the market.