The lively Spring Festival has passed, and many companies have started calculating overtime pay for employees during the Spring Festival period. Some companies have arranged annual leave before and after the Spring Festival, and more companies are taking stock of paid annual leave for employees last year and setting a deadline for employees to take their annual leave in 2024 (such as before March 31).

However, in the actual process of labor employment, due to various factors, the phenomenon of not taking annual leave is quite common, which has led to an increasing number of labor disputes. According to the "Regulations on Paid Annual Leave for Employees", "for the number of annual leave days that employees should take but have not taken, the unit shall pay 300% of the employee's daily wage income as annual leave salary compensation". By searching for cases, it can be found that the majority of court judgments require companies to pay compensation for unpaid annual leave at 200% of the employee's daily wage. The legal basis for this is the "Implementation Measures for Paid Annual Leave for Enterprise Employees" published by the Ministry of Human Resources and Social Security. "Article 10: If an employer does not arrange annual leave for employees with their consent or arranges annual leave days for employees that are less than the number of days they should take, they should pay 300% of the employee's daily wage compensation for unpaid annual leave days in the current year, including the employer's payment of the employee's normal working period wage income." How to understand this provision and why it also stipulates the 300% compensation for unpaid annual leave days and statutory holidays stipulated in the "Regulations on Paid Annual Leave for Employees"? What is the difference between a 300% overtime pay? Many HR managers and lawyers are faced with the problem of how to explain.

This article intends to provide an explanation from the perspectives of legislative intent and legal hierarchy.

The author believes that paid annual leave is actually a reward for the hard work of enterprise employees and a supplement to rest days. Its nature belongs to welfare rest days.

1. There are significant differences in nature, regulations, and hierarchy between paid annual leave and statutory holidays.

In terms of nature, statutory holidays are established by the state to commemorate important holidays, historical events, or meet the common rest needs of the whole nation, with universal and unified characteristics. For example, Spring Festival, Labor Day, National Day, etc. are rest periods shared by all workers, reflecting the basic protection of workers' right to rest by the state, and also carrying certain cultural and social significance. Paid annual leave, on the other hand, determines the number of days of leave based on the individual's years of work experience. It is a recognition and reward for the individual's work contribution, and focuses more on meeting the individual's needs for rest and adjustment.

In terms of regulations, the dates and vacation days of statutory holidays are clearly defined by national laws and are mandatory. The number of paid annual leave days is determined based on the accumulated years of work of the employee. If the employee has worked for more than 1 year but less than 10 years, they will have 5 days of annual leave; For those who have been on vacation for 10 years but less than 20 years, they are entitled to 10 days of annual leave; For those who have been here for 20 years, they are entitled to 15 days of annual leave. National statutory holidays and rest days are not included in annual leave. When arranging paid annual leave, employers need to consider the wishes of the employees themselves, but they also have a certain degree of overall planning power.

From a hierarchical perspective, statutory holidays are unified regulations at the national level, with high authority and universality, and must be observed by all employers and workers. Although paid annual leave is also a system stipulated by national laws, employers have a certain degree of autonomy in the specific implementation process. Under the premise of complying with legal provisions, they can make reasonable arrangements based on their own production and operation conditions and the actual needs of employees.

2. Comparison between paid annual leave and regular rest days

Paid annual leave has similarities with regular rest days in terms of rest purposes and salary payment. The purpose of both is to safeguard workers' right to rest, so that they can have sufficient rest and recovery after work, in order to better engage in subsequent work. In terms of salary payment, workers can receive normal wage income during paid annual leave and regular rest days.

Of course, they also have some differences. Ordinary rest days generally refer to fixed weekly rest periods, such as Saturdays and Sundays, with fixed and periodic nature. Paid annual leave is a leave right accumulated by workers based on their years of work, and workers can choose their own leave time within a certain range, with a certain degree of flexibility. Ordinary rest days are a routine rest arrangement for workers, while paid annual leave is an additional welfare rest for workers and a special reward for long-term work.

Therefore, reference can be made to Article 44 of the Labor Law of the People's Republic of China, which stipulates that if a worker is arranged to work on a rest day but cannot arrange compensatory leave, they shall be paid a wage remuneration of not less than 200% of their salary. Paid annual leave is a rest period that workers should enjoy. If workers continue to work without taking annual leave, a compensation standard similar to overtime on rest days, that is, an additional 200% of daily wage, is given. This is in line with the principles of labor law protecting workers' right to rest and fair and reasonable compensation.

From labor arbitration cases, in some disputes over compensation for unused annual leave, arbitration institutions and courts also refer to the calculation method and compensation standards for overtime pay on rest days when determining compensation for unused annual leave wages. Judge based on the actual additional payment of 200% daily wage, consistent with the idea of compensation for overtime on rest days. This indicates that in practice, understanding paid annual leave as a rest day has certain rationality and feasibility in legal application and dispute resolution.

On the other hand, Article 10 of the Implementation Measures for Paid Annual Leave for Enterprise Employees further clarifies: "If an employer, with the consent of an employee, does not arrange annual leave or arranges for an employee's leave days to be less than the number of annual leave days that should be taken, it shall pay 300% of the employee's daily wage income as compensation for the unused annual leave days in the current year, including the employer's payment of the employee's wage income during normal working hours

From this provision, it can be seen that the salary compensation for unused annual leave consists of two parts. One part is the salary income during the normal working period of the employee, which is the labor compensation that the employee should have received in the first place; The other part is an additional 200% daily wage paid as compensation for the employee's unused annual leave. This regulation aims to encourage employers to actively arrange annual leave for employees, while ensuring that workers can receive corresponding economic compensation when they have not taken annual leave.

In summary, understanding paid annual leave as a rest day nature can help us better understand the provision that unpaid annual leave compensation is twice the daily wage. From the perspective of legal regulations and practical operations, there are many similarities between paid annual leave and rest days in terms of salary payment and rest purposes, and they have the attribute of welfare rest days.