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[Excerpt] From May 1, 2011, it will be a criminal offence for a company to intentionally fail to pay wages as a result of an amendment implemented by the National People’s Congress to PRC Criminal Law (“the Amendment”). Both the company and its responsible management will be liable to criminal prosecution for the intentional failure to pay wages. This is a significant departure from the administrative penalties which were previously applicable in such cases.

In order to prove the offence, the following elements must be present: (i) there must be an avoidance of payment of wages; (ii) this can be by means of transferring assets, evasion by going into hiding, or where there is an ability to pay wages but a refusal to do so; (iii) the amount involved is relatively large; and (iv) there is a refusal to pay upon receipt of an order to do so by the relevant governmental authorities.


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