1. 5 For Asia (India and the People’s Republic of China), summarize key facts about wage and salary, paid time-off benefits, and protection programs.

According to the CIA World Factbook, India is a democratic federal republic with a diverse economy ranging from traditional farming to high-technology industries.⁴² India’s labor force is quite large with 502.2 million individuals with a per capita GDP of $5,800.00. The Indian economy, though steadily growing at close to 5 percent annual rate, is plagued with income disparity and developmental challenges similar to China. More than half of India’s output is created with less than one-quarter of its labor force, and services are the major source of economic growth. Strong economic growth combined with easy consumer credit and a real estate boom is fueling inflation concerns, and the huge and growing population poses fundamental social, economic, and environmental problems. Basic constitutional legislation governs the employment relationship for all employees, ensuring equality of opportunity to public employment and prohibition of child labor.

The Directive Principle of State Policy has statutes that affect various aspects of the employment relationship (e.g., working conditions and participation in management).⁴³ Some of the key employee benefits provided by employers in India are provident fund, gratuity (bonus), pension (i.e., either defined benefit or defined contribution), housing, car, loans, life insurance protection for dependents, health and disability benefits, medical benefits for employees and their families, and leave encashment.⁴⁴ The Employees’ Provident Fund Organization is one of the world’s largest Social Security programs with more than 35 million members. Gratuities apply to most employees in India, and these are funded through employer contributions totaling 4.5 percent of payroll.⁴⁵

There are wide variations between the public and private sectors, with the Ministry of Labour and labor laws governing employment relationships in the public sector and with more employer discretion allowed in the private sector. In addition, all blue-collar employees and factory workers are governed under existing labor laws.

The People’s Republic of China (PRC), as reported by the CIA World Factbook, is a communist state characterized by a fast-growing economy that has shifted over the past couple of decades from a centrally planned system to a more market-oriented one.⁵¹ With a labor force of 801.6 million people and a per capita GDP of $12,900.00, PRC has been experiencing continuously high annual GDP growth at around 7.5 percent. Even though the purchasing power parity of PRC has become one of the top in the world, the lower per capita GDP is an indication of income disparity within various strata of society. One of the key challenges for the government has been to sustain adequate job growth for tens of millions of workers laid off from state-owned enterprises, migrants, and new entrants to the workforce.

The PRC Labor Law was established in 1995, resulting in a break from the traditional “iron rice bowl” system of employment, with a shift from state-owned enterprises to private ones, a move that has given rise to new employment relationship issues.⁵² Under the older welfare system, the workforce was considered the property of the state, and such benefits as housing, medical, and retirement schemes were payable directly by the state-owned enterprises to the employees. Since the introduction of the PRC Labor Law, the employment relationship is now defined by individual contracts.⁵³

 There is a unified medical insurance system with all employers and workers participating in this system. Employers contribute 6 percent of payroll to the system, whereas employees contribute 2 percent of their salary. Health insurance is based on Basic Medical Insurance Fund consisting of a Pooled Fund and Personal Accounts. Employees’ contributions go directly to their personal accounts and 30 percent of employer contributions are paid into this account. Covered workers receive medical benefits at a chosen accredited hospital or clinic on a fee-for-service basis. The individual account is used to finance medical benefits only, up to a maximum equal to 10 percent of the local average annual wage. The social insurance fund reimburses the cost of the medical benefit from 10 to 400 percent of the local average annual wage, according to the schedule. Medical treatment in high-grade hospitals results in lower percentage reimbursements, and vice versa. Reimbursement for payments beyond 400 percent of the local average annual wage must be covered by private insurance or public supplementary schemes. Contract workers receive the same benefits as permanent workers. Per capita expenditure on health insurance based on the country’s PPP exchange rate was $480.00 in 2012

 Minimum wage in Germany is established through the collective bargaining process. In Germany, there are two types of collective agreements. First, association agreements are made between trade unions and employers’ associations. Second, company agreements are made between trade unions and individual employers. An extension of either type of agreement to other sectors or employers may be granted upon request of at least one party to the collective agreement.

As an example, the agreement for the metalworking industry in Baden-Württemberg has been selected because it concluded a new pay framework agreement (ERA-Eckentgelt) in 2003, and in February 2004, concluded a collective agreement fixing the projected percentage increases in minimum wage for the next 26 months. The German government does not mandate a minimum wage, except for construction workers, electrical workers, janitors, roofers, painters, and letter carriers, set by collective bargaining agreements in other sectors of the economy and enforceable by law.

 Employees cannot be required to work on official holidays, which range from 10 holidays per year in northern Germany to 13 in southern Germany. The statutory minimum vacation has been set at 24 working days (or 4 weeks because Saturdays are counted). Younger workers have a right to a vacation of 25–30 working days; disabled workers have an additional 5 days of vacation. There is minimum 6-month employment eligibility for vacation. Under the terms of the Maternity Leave Law, time away from work as a result of maternity leave or other limits on work by pregnant women and mothers must be counted as time worked for the purpose of determining entitlement to vacation time. Employees may take 5 days annually or 10 days every 2 years (under individual state level statutes) as paid holidays for continuing education purposes at only state-approved institutions. The employee retains a job if he is drafted for military or called for military exercises with a suspended employment relationship. The employee should receive regular pay during illness for a period of 6 weeks.

Expectant mothers can take 6 weeks’ leave before the due date and 8 weeks after giving birth. During this time, the employee must be paid at least their average salary or wages calculated on the basis of the last 13 weeks before commencement of leave. An employee can request up to 3 years of child-rearing leave. Employers must guarantee return to the same job following completion of this leave. Any payments for child-rearing leave are made solely by the national health authority.