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December 14, 2011

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Construction workers often lose pay

THREE-FOURTHS of construction workers are sweating in big Chinese cities, including Shanghai, without labor contracts, which means it is easier for their employers to stand them up in salary disputes, according to a survey by Peking University.

The survey was based on an investigation of recent construction labor markets in Shanghai, Beijing, Chongqing and Shenzhen.

It found that 75.6 percent of the construction workers, mostly migrants hailing from China's vast, less-developed rural regions, said they had not signed any recruitment contact. The absence of a formal contract puts workers at a disadvantage in getting timely payment for their jobs.

Only about 6 percent of construction workers in Shanghai said their salaries were settled at the end of each month, about the same as the level in Beijing, the survey showed. The percentage is about 23 percent in Shenzhen.

Shanghai Daily interviewed some major construction group managers in Shanghai and their statements echoed the finding. The local industry insiders said the trend is for big construction companies, including the state-owned groups, to no longer keep stable teams of construction crews of their own.

The general contractors, usually the big companies on top of the construction projects, outsource segments of the tasks to various legal smaller private companies.

The big firms pay the subcontractors on a project basis while the smaller constructors hire workers themselves.

"Legally, the subcontractors are obliged to sign contracts with the migrant workers they hire," said a manager with Shanghai Construction Group, who asked not to be named.

"But given the vast number of subcontractors involved on the market and high mobility of the construction workers, the inspection to make sure these subcontractors comply by the work-contract rule is difficult," he added.

Other market insiders also said the absence of labor contracts between subcontractors and workers is common, and this creates a disadvantage for workers who can find it hard to defend their rights when their employers deliberately delay paying them or even run out on them without paying.

"In some cases, the small business subcontractors just flee overnight," the Shanghai Construction Group manager said. "The general contractors have already paid the subcontractors off based on the outsourcing project contracts, but the workers are left unpaid of their due salaries by their disappeared employers."

He cited a recent example in which seven migrant workers were owed up to a total of 440,000 yuan, based on their six months' pending salaries from last year for building a rail project. The private subcontractor refused to settle the payment after the outsourced project was completed, the workers said.

"The workers complained to us as the general contractor. Under pressure from us, the subcontractor finally cleared the payment to the workers on Monday," the official said. "We will warn the subcontractors they will lose the business partnership in the future if they don't pay their workers in a timely manner."

A common practice by the subcontractors is that they pay some cash to the workers each month to cover their basic daily spending but wait until the end of the construction projects or until several months have passed to pay the majority of the salaries.

"So long as we get the jobs, we can agree to such practice," said Yan Gaoyi, a 47-year-old construction worker from Sichuan Province. "But the problem is when we finish our work, some bosses don't pay us on time as they have promised."

He said many of his fellow workers had experienced this problem, which he described as "common."

Some big local construction companies said they would ask their subcontractors to arrive on the scene to settle any unpaid salaries with the migrant workers before the Spring Festival in an effort to protect the laborers.


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