What is the difference between standby duty and overtime?

I. The facts

In November 2015 Ms Zhang joined the defendant, a Shanghai international travel agency, as an airline ticket salesperson. Attendance was recorded by fingerprint. The parties signed an employment contract for the period from 23 November 2015 to 22 November 2018, providing for probationary wages of RMB 2,700 a month and RMB 3,000 after probation, with wages for the preceding calendar month paid by bank transfer on the 10th of each month. The contract provided for working hours from 8.30 am to 5.30 pm, eight hours a day, five days a week. The person in charge at the defendant, Mr Ma, arranged for Ms Zhang to handle customers' ticket enquiries and bookings in a WeChat group between 6 pm and 10 pm after work, and the defendant paid her RMB 1,000 a month as a standby allowance for this. If she did not respond to a customer promptly, Mr Ma dealt with it himself. Her monthly income consisted of basic wages of RMB 3,000, the standby allowance of RMB 1,000 and a meal allowance of RMB 25 a day based on days actually worked.

On 7 December 2018 Mr Zhang, the legal representative of the defendant, sent Ms Zhang a WeChat message: "After a long think I have had to write this message. The time working together may only last until before the New Year, that is, the end of January 2019. Because of the company's operating problems, the business has been loss-making for more than three years, Mr Ma will also be making changes after the New Year, and I cannot attend to this side either. Dragging it on would be irresponsible to everyone." Ms Zhang replied: "Really? So it closes once Mr Ma leaves?" Mr Zhang replied: "I cannot attend to it either; I have asked him to stay another six months to wind things up." Ms Zhang replied: "Oh, I see."

On 31 January 2019 Mr Zhang messaged Ms Zhang: "Today is your last day at the company. I am reluctant, but reality has to be faced. I hope you all find work you like, and I wish you all the best." Ms Zhang then messaged him: "Oh yes, boss, what is this money from finance?" Mr Zhang replied: "It is a small token from the company, to thank you." Ms Zhang asked: "Compensation? Bonus?" Mr Zhang replied: "This red packet is the company's thanks to you. Business has not been ideal, but the company still wanted to express its gratitude as best it could." The parties exchanged several WeChat messages about compensation after the termination and about the nature of the RMB 10,000 already paid.

The standby work went beyond answering questions: where a customer in the WeChat group wished to buy a ticket, Ms Zhang had to obtain a quotation, quote a price and issue the ticket. She paid for tickets in advance and claimed reimbursement from the company the following day. On some occasions the amount she claimed exceeded the actual cost of the ticket, and she over-claimed RMB 8,421 in total.

On 5 March 2019 Ms Zhang applied to the Songjiang District Labor and Personnel Dispute Arbitration Commission, claiming: (1) economic compensation of RMB 19,600 on termination; (2) a difference in double wages of RMB 11,200 for the period from 23 November 2018 to 31 January 2019, for which no written contract had been signed; and (3) overtime pay of RMB 77,418 for four hours a day from 1 February 2017 to 31 January 2019. The defendant counterclaimed for the return of RMB 8,421 in losses caused by breach of the employment contract and liquidated damages of RMB 75,789. On 28 April 2019 the commission issued its award in Song Lao Ren Zhong (2019) Ban Zi No. 827: (1) the defendant to pay a difference in economic compensation of RMB 7,850; (2) the defendant to pay a difference in double wages of RMB 5,100.60 for the period from 23 December 2018 to 31 January 2019; (3) Ms Zhang to pay the defendant RMB 8,421 in losses; (4) the remaining claims of both parties not supported. Ms Zhang then sued, claiming: (1) economic compensation of RMB 17,850; and (2) overtime pay of RMB 77,418 for four hours a day between 6 pm and 10 pm from 1 February 2017 to 31 January 2019.

II. The court's view

Economic compensation is to be calculated on the wages the employee receives for normal attendance. The standby allowance was remuneration for handling work after hours and was plainly not wages for normal working time, and the meal allowance likewise does not form part of wages. Economic compensation should therefore be calculated on the basic wage of RMB 3,000. The RMB 10,000 paid to Ms Zhang by red packet was paid on departure, and the company's staff had described it as thanks and compensation, so it should be treated as economic compensation already paid. The company should therefore pay the difference of RMB 500 (3,000 × 3.5 - 10,000). Since the company did not bring proceedings after the award, it is treated as having accepted the award and must perform it, that is, pay the difference in economic compensation of RMB 7,850.

Where an employer arranges for an employee to perform standby duties connected with the employee's own work but the employee may rest during that time, the time is not treated as overtime. The defendant arranged for Ms Zhang to carry out standby duties connected with her work at home after hours; the place of work was her home, and on her own account, if she was showering or dealing with personal matters and did not see a customer's message in the WeChat group, Mr Ma would handle it. The defendant's requirements as to working time and availability were therefore relatively loose, and she was able to deal with personal matters at the same time, so the court could not support her claim for overtime pay. The judgment was as follows.

1. The defendant shall, within ten days of the judgment taking effect, pay Ms Zhang Yan the difference in economic compensation on termination of RMB 7,850;

2. The defendant shall, within ten days of the judgment taking effect, pay Ms Zhang Yan the difference in double wages of RMB 5,100.60 for the period from 23 December 2018 to 31 January 2019;

3. Ms Zhang Yan shall, within ten days of the judgment taking effect, pay the defendant RMB 8,421 in losses;

Case source: (2019) Hu 0117 Min Chu No. 9958.

A similar case is (2025) Hu 02 Min Zhong No. 10661.

III. Minton's view

National law does not regulate standby duty clearly, though some regions have issued local rules. Article 3 of the Answers of the Shanghai High People's Court on Several Issues in the Trial of Labor Dispute Cases provides: "Several issues concerning standby duty arranged by an employer. (1) In the following situations a Labor Dispute body will not support an employee's claim for overtime pay: (i) standby duty that is unrelated to the employee's own work and is temporarily or systematically arranged by the employer for security, fire safety or holiday purposes; (ii) standby duty that is related to the employee's own work but during which the employee may rest. (2) In the above situations the employee may require the employer to pay the corresponding allowance in accordance with its internal rules, a collective contract, a single collective agreement, the employment contract or established practice." Article 56 of the Questions and Answers (I) of the Beijing High People's Court and the Beijing Labor and Personnel Dispute Arbitration Commission on the Trial of Labor Dispute Cases provides: "In the following situations a claim by an employee for overtime pay will generally not be supported: (1) standby duty unrelated to the employee's own work arranged by the employer for security, fire safety or holiday purposes; (2) standby duty related to the employee's own work but during which the employee may rest. In such situations the employee may require the employer to pay the corresponding allowance in accordance with the employment contract, internal rules or collective contract."

"Standby duty" is therefore work that an employer, for reasons of security, fire safety or holidays, arranges for an employee to perform outside normal working hours where the intensity is lower than normal. It differs from overtime in the content and purpose of the work, its intensity and its legal basis. Overtime is a continuation of the employee's own work for the purpose of completing production or work tasks, and occurs where working time exceeds the statutory limit; its intensity is comparable to that of normal work, and overtime is subject to the limits in the Labor Law — no more than one hour a day, or, where extension is necessary for special reasons and the employee's health is protected, no more than three hours a day and 36 hours a month. Standby duty is usually arranged for security, fire safety or holiday cover, or to deal with emergencies or urgent official business such as natural disasters or the COVID-19 pandemic; it is non-productive work performed outside normal hours, the employee may generally rest at the workplace depending on the circumstances, and apart from patrols, record-keeping and reporting the employee may use the time in the duty room as he or she wishes. The intensity required is therefore not high, and there is no limit on its duration.

In practice arbitration and adjudication bodies reach one of three outcomes. Where the employee performs standby duty unrelated to his or her own work and claims overtime pay, the claim is generally not supported. Where the standby duty is related to the employee's own work but the employee may rest during it, a claim for overtime pay is also generally not supported. Where the standby duty is related to the employee's own work and the employee may not rest, the intensity is comparable to normal work and the employer must pay overtime. If the time is found to be overtime, overtime pay must be paid under the Labor Law, and the Interim Provisions on Wage Payment set out how it is calculated; whether a standby allowance is payable, and how much, must be agreed by the parties in advance (in practice time off in lieu is also used) and may be governed by the employer's internal rules.

In this case Ms Zhang performed standby duties related to her own work outside normal hours, but she was able to rest during that period and the company paid a standby allowance, so the court did not support the claim for overtime pay. In practice arbitration and adjudication bodies apply the distinction described above. In (2024) Yue 01 Min Zhong No. 9891, for example, the court held that the difference lies in this: overtime is a continuation of the day's work, whereas standby duty is being on call during a special period. Mr Ni was deputy manager for safety technology at a petrochemical terminal, and his daily work was to coordinate safety management at the terminal and handle technical matters. Between 2013 and 2017 the company arranged for him to be on duty at the terminal on non-working days. He took the view that he had been supervising production safety on site, that this was overtime, and claimed more than RMB 180,000 in overtime pay. His duty office, however, was equipped with a bed for resting, and during duty he did not have to work continuously at high intensity: he had only to carry out routine inspections, stay contactable and respond to emergencies, and could rest when nothing was happening, so the intensity was far below that of his normal work. Genuine overtime requires the employee to continue performing the core work at the same intensity and standard as normal work, as on a production line under pressure, in finance at period end, or in a post that operates continuously.

In summary, Minton suggests that employers should put standby arrangements in place in advance, by internal rules or by written agreement with employees, so as to avoid unnecessary disputes, and that employees should keep full records to show whether the content and intensity of the work during that period matched their normal work, and should claim overtime promptly where the time is in fact overtime.