Measures for the Payment of Wages by Enterprises in Shanghai Municipality (‘2016 version’) has been taken into effect on 1 August 2016

The ‘Tentative Provisions on Payment of Wages’(LAO BU FA [1994] No.489), and the ‘Supplementary Provisions to the Tentative
Provisions on Payment of Wages’ (LAO BU FA [1995] No.226) have prescribed the principles on the payment of wages, many local
labor authorities have released local regulations accordingly. 20 years have passed, those regulations have to be updated. Recently,
the ‘Measures for the Payment of Wages by Enterprises in Shanghai Municipality’ has been amended again. Compared with the 2003
version, the 2016 version has amended many aspects, in which those articles related to overtime pay shall be highlighted.

To clarify the basic overtime pay(‘BOP’)

The 2003 version fails to clarify ‘BOP’. In 2010, Shanghai High People’s Court has released the ‘Answers to Several Issues in
Deciding Labor Dispute Cases’, in which some factors are list on deciding ‘BOP’ from the judicial aspect. The 2016 version
has clarified ‘BOP’ from the administrative aspect, which says ‘BOP’ shall be calculated according to the laborer’s regular
monthly wage, not including wage paid under special circumstances such as year-end bonuses, commuting subsidies,
housing subsidies, night shift allowances, summer high-temperature allowances, overtime pay and etc..

The 2016 version has further prescribed that if the wage actually performed is inconsistent with what is specified in the
labor contract, it shall be calculated according to the laborer’s monthly wage actually performed.

To amend the calculation method on the overtime pay of the piecework wages

In addition to the precondition for the overtime pay of the piecework wages as ‘working beyond the statutory working
hours ’, the 2016 version further prescribes another precondition which is ‘compeleting the regular piecework quota’.

The piecework quota shall be reasonably formulated in accordance with the democratic management procedures.

To clarify the overtime pay shall not be applied to the holidays for some citizens

During the holidays for some citizens such as the Women’s Day and the Youth Day, as for laborers who participate in
celebrations organized by the society or by the enterprises and those who work as usual, the enterprise shall pay wages but
shall not pay overtime wages. If the holiday falls on a rest day and the enterprises arrange laborers to work, the enterprises shall
pay overtime wages to the laborers in accordance with the regulations on the overtime pay for holidays.