Foreigner jailed, fined for not paying staff wages

This is the first such court case in Shanghai involving a foreign defendant since China's Criminal Law made non-payment of employees' salaries a punishable offense.

The foreign legal representative of a local clothing manufacturer has been sentenced to five months’ detention and fined 40,000 yuan (US$6,050) for not paying employees’ salaries.

The case at Qingpu District People’s Court is the first in the city involving a foreign defendant since China's Criminal Law made non-payment of employees' salaries a punishable offense in 2013.

The 65-year-old defendant, surnamed Hong, didn’t pay the salaries of his employees for January and had been in his home country, which was not revealed, from the end of January until August 20 when he was caught by police at an airport in Dalian, the court said.

The total amount owed to the 158 employees at Hong’s Mingxin company was said to be around 608,000 yuan.

The labor supervision and inspection team in the suburban district where the company was located intervened on February 7 after employees complained that their boss hadn’t returned to the company the previous day as expected.

The district human resources and social security bureau issued a written decision on February 23 which demanded the company pay the salaries within 15 days, but Hong was out of touch during that time.

The district police put Hong on a wanted list on March 16 after the bureau reported the case to them.

Meanwhile, the bureau activated a provision to relieve the workers’ economic plight, handing over around 340,000 yuan. The money was paid by the Xianghuaqiao subdistrict government which administers the area where the company is based.

Previously, the company’s accounting office had paid the 160,000 yuan that was in the company’s bank account to the employees, mostly migrant workers.

The employees also sought to have the company pay them nearly 3 million yuan in compensation for terminating labor contracts and for salaries during annual leave. Their case was supported by the district labor arbitration commission.

Hong has been under criminal detention in Shanghai since August 25 and was arrested on September 6 on the charge of avoiding paying employees’ salaries.

By the end of September, Hong’s family had managed to pay what the workers were owed, including compensation, according to the court.

In court, Hong said he acknowledged the charge and said he didn’t return to China as planned because he wasn’t able to secure new orders in his home country.

According to the criminal law, anyone convicted of such crime can be jailed for up to three years and fined.

The court said that as Hong had confessed and because the employees had been paid it could impose a lighter sentence.  

Hong’s Shanghai company had been operating since 2004 and had no history of labor disputes. Employees told Shanghai Daily the company's orders have been falling since the second half of 2016.

Zhang Changming, prosecutor in the case, said Hong should be released by February 17 next year.

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