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Excitement at receiving a pay rise was soon dampened for a worker surnamed Liu, after his company informed him his bonus and allowance would be cut.

 

The firm, an electronics company in the southern city of Shenzhen, followed the government's guidelines to raise the minimum monthly salary of its employees from 690 yuan (US$86) to 810 yuan (US$101) starting from July 1.

 

However, it adjusted bonus and allowances down by a total of 120 yuan (US$15).

 

"The government improves our salaries but the company management finds its own way to cope with it. Employees like me will not benefit," Liu told local paper Shenzhen Evening News.

 

He said the majority of his 3,000 workmates in the company would be affected.

 

The local government announced in late May that the minimum salary level for employees in the special economic zone would rise to 810 yuan (US$101.3) a month, an increase of 17.4 percent year-on-year.

 

It is now the second highest minimum salary after Shanghai.

 

The level for two less developed districts outside the special economic zone also rose 120 yuan (US$15) from 580 yuan (US$72.5) to 700 yuan (US$87.5).

 

Li Yingchun, a lawyer specialized in labor law, said the company has not violated labor laws.

 

"The employers have the right to adjust the bonus and allowance unless it is clearly stipulated in the contract," Li told China Daily.

 

Zhang Ming, a senior official with the city's labor surveillance force, said they are aware of the case, but their attention is focused mainly on those paying below the minimum salary or withholding pay.

 

"As for companies playing tricks after the salary increase, we can only advise them not to ignore the welfare of employees, otherwise experienced and skilled workers will leave," Zhang told China Daily.

 

In September the labor surveillance force will start a city-wide investigation on the implementation of the minimum salary, especially in the labor-intensive manufacturing, catering and construction industries, he said.

 

Offenders will be fined 30,000 yuan (US$3,750) to 50,000 yuan (US$6,250) in accordance with the Shenzhen Employees' Salary Payment Regulation.

 

(China Daily August 8, 2006)