NPC HK deputy proposes increasing paid annual leave days to boost tourism and consumption

Considering that the implementation of working hours and paid annual leave in China is not ideal and there is insufficient protection for the young labor force, Kenneth Fok Kai-kong, a deputy from the Hong Kong Special Administrative Region (HKSAR) to the 14th National People’s Congress, suggested mandatory implementation of policies related to paid annual leave and an increase in the number of paid annual leave days.

Fok proposed amending Article 3 of the current regulations on paid annual leave for employees to increase the number of paid annual leave days based on length of service. According to his proposal, employees who have worked for more than one year but less than 10 years would be entitled to five days per year for the first two years, with an additional day for each subsequent year, up to a maximum of 10 days. This proposal is set to be presented at the ongoing two sessions.

"Currently, the implementation effect of the working hours and paid annual leave system in our country is unsatisfactory, and there is insufficient protection for the young labor force," Fok said, emphasizing that comprehensive implementation and improvement of the existing working hours and paid annual leave system are objective requirements to enhance the well-being of the people and an important aspect of expanding domestic demand.

He noted that it will help promote a virtuous cycle of consumption and investment, accelerate the transformation of the tourism industry into a significant engine for promoting national economic growth, and facilitate the circulation of the national economy.

Such a proposal also aims to address issues such as "no leave," "cannot take leave," and "dare not take leave" among the labor force in China.

According to the regulations promulgated by the State Council in 2008, employees who have worked for more than one year but less than 10 years are entitled to five days of annual leave; those who have worked for more than 10 years but less than 20 years are entitled to 10 days of annual leave.

With the overall aging trend of the population structure in our country, the young labor force with less than 10 years of service is playing a more crucial role and is also facing significant material and mental pressures, Fok said.

"Five days of statutory annual leave cannot ensure their adequate rest. Over time, this will have an impact on the spiritual cultivation, overall image, and level of dedication of society," he added.

Due to the imperfect vacation system, China's tourism industry has also been affected, the deputy said. Firstly, domestic tourist travel peaks are too concentrated, leading to significant supply-demand imbalances. The “tide effect” in the tourism market is evident, with excessive travel demands concentrated during holidays such as May Day and National Day, putting enormous supply pressure on various sectors including civil aviation, railways, roads, urban construction, commerce, scenic spots, and accommodation, Fok noted.

This results in decreased service quality, poor tourist experiences, and severely impacts the competitiveness of China's tourism industry, he said.

The existing annual leave system suppresses the consumption power of the younger demographic, which dominates the tourism market, the deputy said.

In 2023, the group with the highest per capita travel frequency in China is Generation Z, who has independent decision-making power for travel consumption. However, Generation Z generally has less than 10 years of work experience, and the 5-day annual leave is insufficient to effectively unleash their travel consumption potential.

Fok’s proposal has garnered wide applause on China’s social platform Weibo, as it has been trending among the top 10 topics on Tuesday morning. Relevant posts have been read more than 110 million times. Some netizens, especially those from Generation Z, said such suggestions speak their minds.

The deputy also suggested the mandatory implementation of policies related to paid annual leave, improving provisions regarding corporate legal responsibilities violations, and strengthening constraints on the implementation of annual leave by enterprises are essential.

Currently, some companies are circumventing policies by offering cash in exchange for annual leave. Relevant authorities should establish detailed regulations prohibiting companies from arbitrarily canceling employees' annual leave agreements in non-exceptional circumstances, Fok said.

“Clear provisions should be made for situations where companies genuinely cannot arrange annual leave for employees due to work requirements,” he said.

Following Hong Kong's example, constraints on buyback conditions should be imposed. Workers could opt to accept employer payments in lieu of a portion of their annual leave, but this option should only apply to annual leave exceeding five days, Fok added.