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Pay raise guidelines lowered in Guangzhou

By Zhan Lisheng (China Daily)
Updated: 2009-08-05 07:50

GUANGZHOU: Workers here could have their wages cut under a new salary guideline designed to take pressure off businesses during the financial crisis.

According to Guangdong's corporate salary guideline for 2009, the standard salary increase has been set at 7 percent this year, compared to 15 percent in 2008.

The upper limit is 12 percent, compared with 21 percent for 2008. The lower limit is zero or even negative, compared with a 5.5 percent increase in 2008. The guideline did not specify by how much a wage could be reduced.

This is the first time that the province has set the lower limit of salary increase at zero or below.

The annual salary guideline, though not compulsory among businesses throughout the province, is an important reference data for them, particularly foreign-funded businesses, to map out salary policies.

"The pressure of labor costs on enterprises will be lessened, at least morally," said Liu Ying, a human resources manager in the province.

Some bosses might lower the salary level of their staff under the excuse of the salary guideline, Liu said.

The local labor watchdog and trade unions need to ensure that workers' rights are protected, Liu added.

Tan Yongnian, supervisor of a garment company in Guangzhou's Tianhe district, said he was surprised to hear the news.

"I've never imagined that the provincial labor watchdog could allow us to maintain or even lower the salary level of our employees in its annual salary guideline. It is really good news for me amid the economic downturn."

This year's salary guideline is more pragmatic than ever before, Tan said.

"The guidelines must have taken the negative impact of the global financial crisis on the enterprises into consideration," he said.

Tan's business experienced a massive decline in the first few months of this year. He is not yet confident of a possible rebound of his business despite the fact that he has received some short-term orders in past months.

"I would like to offer tempting salaries to secure my staff. However, it is by no means sustainable to maintain or even enhance the salary level when my own business is running at a loss," he said.

The Guangzhou salary levels follow a guideline issued by the Shenzhen government late last month, also aimed at softening the impact of the financial crisis on local companies.

It lowered the income benchmark for the first time since 1999.

The guideline is a reference for 566 types of jobs in the city.

The highest-level and medium-level benchmarks stand at 23,700 yuan ($3,470) and 2,460 yuan per month, respectively, decreasing by 8.5 percent and 3.9 percent each from last year.

(China Daily 08/05/2009 page5)