Base pay cut from 30k to 20k? Under Chinese law, needs your written consent for pay structure change. Object in writing, don't sign, file arbitration within 1 year.
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Last month, your salary was RMB 30,000 fixed. This month, they say: "We're introducing a performance bonus system. Your base pay is now RMB 20,000, plus up to RMB 15,000 in bonuses based on your performance."
Sounds like you could earn more, right? But look closer: your guaranteed monthly income just dropped by RMB 10,000.
This is happening more often. Employers call it "incentive restructuring" — but in legal terms, it's a unilateral modification of your employment contract. And under Chinese labor law, that's not something they can do without your agreement.
*What the Law Says
Article 35of the PRC Labor Contract Lawis clear: changing the terms of an employment contract — including salary structure — requires mutual consent between employer and employee, and must be documented in writing. Courts have consistently held that employers cannot unilaterally alter compensation arrangements.
Even when an employer ties the change to a "performance assessment system," the same rule applies. A court recently ruled that a unilateral change to performance metrics — where the new metrics were so high that no employee could meet them — was invalid because the employer failed to negotiate with the employee.
*What This Means
If your employer announces a new pay structure that reduces your base salary — no matter how they frame it — you have the right to say no. This is a contract change, and both parties must agree.
If you accept it without objection, you risk being seen as having accepted it. But a recent court ruling makes clear that silence does not automatically equal consent. Still, the safest approach is to raise the issue in writing.
*What to Do Then?
First, do not sign anything that acknowledges or agrees to the new pay structure. Signing is the clearest way to waive your right to object.
Second, put your objection in writing — email/WeChat text is fine — stating that you do not agree to the change and that you expect your salary to continue under the original terms.
Third, keep records. Save your original contract, old payslips showing your previous base salary, and the new policy or announcement.
Fourth, if the employer implements the change anyway (pays you the reduced base salary), you have legal options:
* File for labor arbitration within one year of the pay cut. The arbitration is free.
* Consider resigning for "economic coercion" under Article 38 of the Labor Contract Law. If the employer fails to pay your full salary, you can resign and claim severance pay (two months salary per year of service).
Remember, Chinese labor law applies to foreign employees holding a valid work permit and residence permit. If your employer refuses to pay your full salary, you can file a labor arbitration claim like any Chinese employee. You are not treated differently.
In Conclusion: don't let the words "incentive" or "bonus" distract you. Look at the guaranteed number. If your base pay goes down, your employer is effectively cutting your salary. And under Chinese law, that requires your written consent.
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