劳部发[1994]481号
（Issued by the Ministry of Labour on 3 December 1994 and effective as of 1 January 1995.）
颁布日期：19941203 　实施日期：19950101 　颁布单位：劳动部

Article 1　These Procedures are formulated in accordance with the provisions of the PRC， Labour Law in order to standardize criteria for economic compensation to labourers for breach or termination of labour contracts.

Article 2　Economic compensation to labourers shall be paid in one installment by the employing work unit.

Article 3　Where an employing work unit wrongly deducts or delays payment of wages to labourers without valid cause， or refuses to pay overtime compensation to employees， such work unit shall， in addition to paying the wages to labourers in full by the stipulated time， also pay economic compensation equal to 25% of the corresponding wages.

Article 4　Where wages paid to labourers by an employing work unit is lower than the local minimum wage standard， when such work unit should make a supplemental payment for the deficient amount， and must at the same time pay additional economic compensation of 25% of the corresponding deficient amount.

Article 5　Where the employing work unit terminates a labour contract on a unanimous decision through consultation between the parties involved， the employing work unit shall pay economic compensation equal to one month's wages for every full year of work， up to a maximum of twelve months， according to the employment term of their labourers. Where the employment term is less than one year， economic compensation shall be paid in accordance with the standards for one year.

Article 6　When a labourer falls ill or is injured off duty and the Labour Inspection Committee confirms that he/she is unable to perform his/her original work or other work arranged by the employing work unit， and the labour contract is terminated， the employing work unit shall pay economic compensation equal to one month's wages for every full year of work， according to term of employment at such work unit， and at the same time shall pay a minimum medical subsidy of 6 months' wages. When a labourer becomes seriously or terminally ill， an additional medical subsidy shall be paid. The minimum additional amount for a serious illness shall be 50% of the medical subsidy. The minimum additional amount for a terminal disease shall be 100% of the medical subsidy.

Article 7　Where a labourer is not competent at his/her job and， after training or revision of his/her work position， still cannot competently perform the job， and the labour contract is terminated by the employing work unit， the employing work unit shall pay economic compensation equal to one month's wages for every full year of work， up to a maximum of twelve months， based on the total length of employment at such work unit.

Article 8　When major changes arise in the objective conditions on which a labour contract has been concluded that make it impossible for the labour contract to be performed， and upon consultation， both parties cannot reach an agreement on the revision of the original labour contract， and the employing work unit terminates this labour contract， the employing work unit shall pay economic compensation equal to one month's wages for every full year of work， based on the total length of employment by labourers at such work unit.

Article 9　Where an employing work unit is on the verge of bankruptcy and enters a statutory period of rectification， or where serious difficulties arise in production or business conditions， and staff must be reduced， the employing work unit shall pay economic compensation to the staff reduced based on their length of employment with the work unit equal to one month's wages for every full year of work.

Article 10　Where an employer work unit terminates a labour contract and does not pay the labourers concerned economic compensation in accordance with the relevant provisions， in addition to the economic compensation being paid in full， additional economic compensation equal to 50% of the amount of such economic compensation must be paid.

Article 11　The wage calculation standard for economic compensation in these Procedures shall refer to the average monthly wage of a labourer under the enterprise's normal production conditions for the 12 months prior to the termination of the contract.

When an employing enterprise terminates a labour contract in accordance with Articles 6， 8 or 9 of these Procedures， and the average monthly wage of a labourer is less than the average monthly wage of the enterprise， payment shall be made according to the standard for the average monthly wage of the enterprise.

Article 12　When economic compensation is listed in the expense budget of the enterprise， welfare expenses allocated to the enterprise according to the stipulated ratio must not be utilized for such compensation.

Article 13　These Procedures shall be effective as of 1 January 1995.