In late 2003, the All-China Federation of Trade Unions (ACFTU) revealed that the total unpaid wages owing to the nation's migrant workers (that part of the agricultural population who find work in cities but are not registered as urban residents) had reached 100 billion Yuan.

In January 2004, just before Chinese New Year, President Hu Jintao and Prime Minister Wen Jiabao made it clear that giving migrant workers their basic overdue wages from 2003 was a priority task. Wen even ordered eight ministries and committees to help with the task. The State Council set up a joint investigation team to monitor the measures being put in place by provincial and municipal governments to help migrant workers claim their wages.

On 23 May 2005, Beijing's Legal Aid and Research Centre for Youth released a "Report on the Cost for Migrant Workers to Guard their Rights". It said that according to ACFTU's incomplete data, by mid November 2004, the overdue wages of all migrant workers in China had reached 100 billion Yuan. It also said that it would cost society at least 300 billion Yuan to ensure this 100 billion Yuan was repaid.

The report was based on material taken from 8,000 questionnaires submitted to the research centre. The replies suggest that to claim wage arrears of 1,000 Yuan, migrant workers have to pay at least 920 Yuan in various charges and lose between 11 and 21 days at work. The lost days will cost them an additional 550 to 1,050 Yuan. On top of that, government and court officials are paid between 1,950 Yuan and 3,750 Yuan in wages for assisting each migrant worker to claim his or her wage arrears. Added together, the total comes to between 3,420 Yuan and 5,720 Yuan. As a result, the report concludes it will cost at least 3,000 Yuan to claim wage arrears of 1,000 Yuan.

The report also demonstrates that as China develops, the Chinese government is paying a heavy price for misconduct within the private sector. The statistics show that the government is paying between 57% and 66% of the total costs of claiming wage arrears. If we also include in the calculations the time spent by civil servants helping to resolve wage arrears cases instead of handling other matters, then the indirect costs involved become even greater.

At the same time, the very fact that migrant workers have to claim wage arrears means that their rights are being violated yet again, because it involves them paying charges and suffering a financial loss higher than the original lost wages. Being aware of the heavy cost, most of them give up their right to claim the arrears, while a few - out of desperation - take extreme means, such as attempting suicide or self-harming, to draw attention to their cases.

The central government has begun to pay more attention to the problem of migrant workers' wage arrears and launched massive campaigns on the issue in late 2003 and late 2004. Yet the problem has still not been resolved. There are complicated reasons behind the problem of wage arrears but one key cause is that migrant workers are not well organized and lack a representative trade union to protect their rights.

From 2002, ACFTU, the only official trade union in China, has been trying to build trade unions at private enterprises. Yet most of these unions operate just as the private entrepreneurs wish and play a passive role in guarding their workers' rights. Moreover, few migrant workers belong to unions. In recent years, ACFTU has been boasting about its efforts to help migrant workers claim their unpaid wages, but the tiny amount ACFTU has helped them to reclaim pales into insignificance compared to the amount still owing to them. One important point to note is that those efforts are made by the district level trade unions, and not by unions at the enterprise level.

Related Labour Law and Regulations:
• Clause One of Article 91 of the Labour Law says that where an employer deducts wages or where there is unreasonable delay in paying wages to workers, the labour administration department shall order it to pay the workers their remuneration or make up for the economic losses they have suffered. It may also order the employer to pay compensation.
• Clause One of Article 6 of the Regulations on Administrative Penalties on Violation of the Labour Law of the PRC says that where an employer deducts wages or where there is an unreasonable delay in paying wages to workers, the labour administration department shall order it to pay workers their remuneration or make up for their economic losses. It may also order it to pay compensation equivalent to between one and five times the total remuneration and the economic losses.
• Measures introduced by Jilin Province to attract migrant workers include a provision saying that where an employer deducts wages or where there is a delay in paying wages to migrant labourers, it shall pay the labourers remuneration and compensation equivalent to between 50% and 100% of the deducted or delayed wages.
• The Regulation on Wages Distribution in Beijing says that where an employer deducts wages or where there is a delay in paying wages to workers, it shall repay the overdue wages and compensation equivalent to 25% of the deducted or delayed wages. If the circumstances are serious, the employer may be required to pay compensation equivalent to twice the amount of the deducted or delayed wages.
• On 24 November 2004, Xinhuanet reported that statistics released by the ACFTU showed that the total overdue wages owing to migrant workers was estimated at 100 billion Yuan. Those workers most likely to be affected by the problem are in the construction and catering services industries. Cases in the construction industry make up 70% of migrant workers' wage arrears cases.
• On 31 March 2005, Xinhuanet reported that as of 4 February 2005, migrant construction workers have been repaid wage arrears totalling 33.37 billion Yuan, 99.1% of the reported figure for overdue wages in the industry. 16.37 billion of the 16.39 billion Yuan owing to migrant construction workers in 2003 has been repaid. This represents a 99.9% success rate. Han Dongfang, speaking on a radio programme on Radio Free Asia on 8 April 2005, questioned this success rate. He quoted two news articles in the mainland Chinese press. On 11 March 2005, Henan Dahe Daily reported that dozens of construction workers had marched in the streets of Zhengzhou City the day before, carrying a car belonging to their subcontractor. The workers said that when they had finished a liquefied gas station project in late 2002, their boss had not paid them. They said they had tried every means to reclaim their wages, but had finally decided to take the boss's car to force him to repay them. In another article, the Chengdu Evening News reported on 11 March 2005 that on 10 March, nine construction workers' leaders had held an auction in the streets to sell a verdict issued by Xichang City People's Court. According to these "sellers," a property developer had owed their construction teams more than 1 million Yuan since the completion of a project four years earlier. In 2004, they took their case to the court, which ruled that the developer should repay them their wage arrears. However, the developer refused to pay and the court could not take any action. As a result, the nine construction workers' leaders travelled to Chengdu with the hope of raising 1.4 million Yuan by auctioning the verdict. The verdict says that the compensation is worth 2.8 million Yuan.

5 October 2005
China Labour Bulletin