Fujian Plans To Issue Salary Increase Mechanism

Fujian Province will set up an employee salary increase mechanism to ensure that salary increases will be adjusted to an enterprise's performance.

In the "Several Opinions on Establishing and Improving Enterprise Employee's Salary Normal Increase Mechanism", Fujian Provincial Labor Department says that companies that have seen a profit increase, but haven't raised employees' salaries accordingly, are likely to be given a warning by the labor department. In 2008, Fujian will implement an industry labor cost principle and the province will release relevant information on the labor cost before the end of July to guide enterprises to fix a reasonable labor cost by regularly auditing and analyzing their labor cost, structure and input/output. Labor departments at various levels will also calculate a salary increase proportion based on an audit of enterprises' annual reports and their actual economic performances.

In addition, Fujian will build a salary collective consultation system among scaled enterprises in the province and ensure a normal increase of employees' salaries through the coordination of government, trade unions and enterprise organizations and by signing a collective agreement.

To make sure that the principle will be duly carried out, the labor department will build a salary collective consultation archive and improve relevant reviewing rules. It will also order companies that fail to implement the salary procedures or have unclear or unreasonable salary agreements to make revisions or rectifications. According to "Several Opinions", soon the income of top managers and owners of state-owned enterprises will be directly related to the enterprise's profit, scale and employees' salaries.