Zhejiang Flyasia E-Business Co., Ltd has received a yellow warning from the Hangzhou Labor Security Supervision Detachment notifying employees of the company that they should protect their own rights and interests since the company has been dilatory in making salary payments.
This is the first warning sent out since the city established a back pay early warning mechanism.
The company reportedly failed to pay its 125 employees after paying the half-month salary for May on June 27, 2008. The arrears amount up to about CNY390,000. Yet only four of the employees requested to the Labor Security Supervision Detachment's assistance.
Due to the negative impact of the sub-prime loan crisis and the global economic depression, many medium and small size enterprises are facing serious survival problems which might cause back pay in the fourth quarter of 2008, according to the Detachment. In response to this, the early warning mechanism aims to prevent the possible incidents through early warning to employees, employment units and related functional departments.
Companies that fail to pay employees' salaries for at least one month or with arrears totaling up to CNY50,000 and with at least 30 people involved will be included in the mechanism. There are four grades of early warning mechanism, blue, yellow, orange and red.
