Yes — but China’s Criminal Law does not criminalise every unpaid wage. Article 276-1 of the Criminal Law, added by Amendment VIII, makes it a crime to evade paying a worker’s remuneration by transferring property or absconding, or to have the ability to pay and refuse, where the amount is relatively large and payment is still refused after the relevant government department orders it.

The three elements that turn a debt into a crime

All three must be present. First, conduct: transferring assets, absconding, or simply having the money and refusing to pay. Second, a relatively large amount — under Article 3 of the Supreme People’s Court interpretation (Fa Shi [2013] No. 3), that means refusing to pay one worker three months or more of remuneration where the sum is RMB 5,000 to RMB 20,000, or refusing to pay ten or more workers where the total is RMB 30,000 to RMB 100,000; each province sets its own figure within that range. Third, the government-order step: Article 4 requires a payment order — a rectification notice or administrative decision from the human resources and social security department or another government department — to be ignored within the deadline. Where the employer has absconded, posting the order at the residence or workplace and recording it counts as service.

The sentence

Article 276-1 provides a sentence of up to three years’ imprisonment or criminal detention, plus or minus a fine. Where serious consequences are caused — for example a worker’s basic livelihood is seriously affected, or a worker asking for wages is met with violence (Article 5 of the interpretation) — the range is three to seven years plus a fine. Unit crime is possible: Article 9 provides that a company that refuses to pay is fined, and its directly responsible managers are sentenced using the individual thresholds.

Paying up can erase the case

Article 6 of the interpretation is the practical heart of the offence. If the wages and compensation are paid before the criminal case is filed, the conduct may be treated as obviously minor and not a crime at all; payment before prosecution can reduce or waive punishment; payment before the first-instance judgment can mitigate it. Article 8 also warns that the person who actually controls the business, not only the registered shareholder, can be prosecuted.

A short illustration

Assume this hypothetical: a factory owner transfers equipment to a related company, leaves the province, and owes 12 workers about RMB 60,000. The labour bureau posts and serves a payment order and he ignores it. That satisfies Article 276-1. If the workers are paid in full before the police formally file the criminal case, the matter can end without a conviction.

Common questions

Q: Is one unpaid salary enough to prosecute?

A: No. The amount must be relatively large, the employer must be evading payment or able to pay, and a government payment order must have been ignored (Article 276-1).

Q: Can a foreign-invested company be prosecuted?

A: Yes. Under Article 9 of the interpretation the unit is fined and its directly responsible managers are sentenced under the same thresholds as an individual.

Q: Does settling with the employees remove the criminal risk?

A: It normally does if the payment and compensation happen before the criminal case is filed (Article 6), which is why the timing of payment is often the decisive issue.

Wang Guan | Co-founder, Beijing Haolue Law Firm | +86 17813108512