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Companies in China must evaluate HR strategies and adjust them to post-COVID-19 era

Since China lifted most of its COVID-19 restrictions, companies have started to reconsider their human resources strategies. Many industries from catering, to retail, tourism, and others were hit badly by the pandemic and were forced to freeze hiring or downsize staff to cut costs and survive financial difficulties.

Currently, there are positive economic signs that suggest it is a good time to reconsider HR planning and recruitment arrangements. Companies can evaluate and adjust their business development plan, dissolve unnecessary business units, and set up new lines of business that meet the new market needs.

As life moves back to normal, a higher number of infections can be expected, therefore enterprises must find ways to protect their employees' health and safety and maintain the continuity of their business operations.

Last December, the Chinese government issued the Circular on Further Optimizing the Implementation of COVID-19 Prevention and Control Measures (“New Policies”). The New Policies lifted most of the controlling measures adopted in the past three years.

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This step towards the normalization of the workplace, puts additional pressure on HR departments. There are several COVID HR policies on infected employees and close contacts that companies can implement to protect their employees' health and maintain continuity of their business operations.

According to the New Policies, infected employees with mild symptoms or without symptoms will be quarantined at home for 7 days and released after getting two negative PCR test results consecutively on day 6 and 7. Only those whose symptoms become serious will be sent to hospitals. Close contacts shall quarantine at home normally for 5 days and released after getting a negative PCR test result on the day 5.

Based on the COVID HR Policies, infected employees and close contacts are entitled to the following benefits:

(1) If an employee is infected with COVID or becomes a close contact, during the quarantine period or medical treatment period, the company shall pay normal salary to the employee and shall not terminate the employment contract due to the reasons of illness, incompetence, change of objective circumstances or mass lay-off. If the employee's employment contract expires during the quarantine period or medical treatment period, the contract term will be automatically extended until such period expires.

Legally speaking, an employee who is suspected to be infected with COVID shall enjoy the same treatment as those of close contacts.

(2) During the quarantine period, the company can arrange an employee who is a close contact to work from home. If the employee is unable to work from home, the company can arrange the employee to take annual leave or other paid leave, and depending on the provisions in local policies, the company may need to or not need to consult with the employee before making such arrangement.

(3) If an employee is still unable to go to work after the quarantine period or medical treatment period is over, the employee shall apply for sick leave or other leave according to law and company regulations and the company shall pay leave salary to the employee according to law and company regulations as well. This policy will become relevant for employees who have post COVID symptoms or those who are reluctant to come to work due to fear of catching COVID.

The New Policies eliminated the possibility of a company “lock-down” in case of an outbrake. Nevertheless, if a large number of employees are infected at the same time, the company’s operations may be compromised. For this reason, firms should implement policies to protect the health and safety of its staff.

The law in China encourages companies to take measures to prevent and control COVID infections by employees at workplaces.

Depending on the situation of their employees and the nature of their business, companies should implement prevention steps, such as regular PCR or antigen tests, temperature checks before entering the building, masks and social distancing in the workplace, and encourage employees to report if anyone in their home has symptoms.

It can be difficult to identify who shall be regarded as close contact. However, the earlier an infected employee or close contact is isolated, the less the virus will spread at the workplace.

Companies may follow up the situation by asking employees to provide PCR test results. If any employee is found to have recovered, or not to be confirmed as being infected, or completed the quarantine period as close contact, the firm can ask him/her to return to work on site.

For close contacts, the company can arrange the employee to work remotely from home during the quarantine period. If the employee is not able to work from home, the company can arrange the employee to take annual leave or other paid leave the employee is entitled to during the quarantine period.

Depending on the industry, entities can offer employees to work flexibly or work from home, to reduce the risks of infection due to commuting with public transportation or gathering at workplaces. How the work flexibility is arranged, is completely up to each company.

In case of a factory or another business which does not allow work from home, a company may consider arranging the employees to do closed-loop production by shifts.

No matter whether a company arranges the employees to do overtime work or be subject to the comprehensively calculated working time system, it must always comply with Chinese labor laws and regulations on overtime and ensure the employees working by shifts to have proper rest.

According to COVID HR rules, if a company decides to suspend operations it must pay normal salary to the employees in the first month. Starting from the second month, the company is allowed to only pay the employees the living allowance, which can go from 70% to 100% of the minimum wage depending on the location.

Can Woodburn help you?

With the lifting of most measures, the spread of the virus may continue for the time being. Companies can encourage their workers to comply with COVID control policies by setting up their own internal regulations in writing and include proper disciplinary measures.

In China, companies must follow the collective consultation procedures provided by statutory law and notify employees of these regulations in advance. According to the COVID HR polices, during the epidemic period, the collective consultation procedures can be made on-line or by e-mail.

The pandemic disrupted the usual hiring routine in China. Recruitment is an important means for companies to obtain talent, and if they cannot find suitable employees over a long period, their ability to operate normally will be affected.

Foreign companies should develop medium and long-term human resource planning strategies to prepare for new challenges in the post-COVID-19 era.


Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.

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