What is the standard for the payment of non compete compensation?

Non-competition is a means to protect the trade secrets of an enterprise by restricting the right of employees to choose their jobs freely to a certain extent, including both incumbent and former employees. For in-service employees, non-compete is an implied legal obligation, and for departing employees, it must be set up in the non-compete agreement, and the signing of the non-compete agreement is generally at the cost of the employer paying a certain amount of economic compensation. At present, the laws of China stipulate that an employer may stipulate a non-compete clause with an employee in an employment contract or confidentiality agreement, and stipulate that after the termination or termination of the employment contract, the employee will be compensated monthly during the non-compete period.

The law does not clearly stipulate the scope of such economic compensation between the employer and the employee. However, if the employer and the employee have not agreed on the standard of severance to be paid to the employee after the termination or termination of the labor contract, then the employee may request the employer to pay the employee 30% of the employee's average salary for the 12 months prior to the termination of the labor contract in accordance with the provisions of the Interpretation (IV) of the Supreme People's Court on Several Issues Concerning the Application of Labor Dispute Cases. In addition, if 30% of the average monthly wage of the employee is lower than the minimum wage standard of the place where the labor contract is performed, it shall also be paid according to the minimum wage standard of the place where the labor contract is performed.

Of course, it is paid every month after leaving the company, so it is called a non-compete restriction, which is to restrict you from working with competitors.

There is no general, the company sets its own, some 50%, some 30%, etc.

Legal analysis: The standard of non-compete compensation is 30% of the average salary of the employee in the 12 months prior to the termination of the labor contract. As a basic condition for the non-compete agreement to take effect, the enterprise must make economic compensation for the non-compete act of deferring the employee's work, and the amount of compensation and the method of payment must also be specified in the non-compete agreement, otherwise the agreement will be invalid.

Legal basis: Interpretation (IV) on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases Article 6 Where the parties have agreed on a non-compete restriction in the labor contract or confidentiality agreement, but have not agreed to give the employee economic compensation after the termination or termination of the labor contract, and the employee has fulfilled the non-compete obligation and requires the employer to pay the employee 30% of the employee's average salary for the 12 months prior to the termination or termination of the labor contract, the people's court shall support it. If 30% of the average monthly salary provided for in the preceding paragraph is lower than the minimum wage standard of the place where the labor contract is performed, it shall be paid in accordance with the standard of the minimum wage for the labor contract performance.

1. The law does not stipulate how to pay the non-compete compensation, whether it is paid on a monthly basis or in a lump sum, and the parties can determine it themselves through negotiation. However, the fees paid in ordinary times cannot be used as economic compensation for the non-compete. There is no basis for setting aside a portion of wages as a secrecy fee or non-compete fee, as the state has strict regulations on wages.

2. According to Article 4 of the ***** Provisions on the Composition of Total Wages issued by the National Bureau of Statistics, "the total wages are composed of the following six parts: (1) hourly wages; (2) Piece-rate wages; (3) bonuses; (4) allowances and subsidies; (5) Overtime wages; (6) Wages paid under special circumstances.

At the same time, in Article 10 it is stated: "Wages paid in exceptional circumstances. Includes:

1) Wages paid according to the hourly wage standard or a certain proportion of the hourly wage standard in accordance with national laws, regulations, and policy provisions, due to illness, work-related injury, maternity leave, family planning leave, marriage and funeral leave, personal leave, family visit leave, regular leave, suspension of work and study, and the performance of state or social obligations; (2) Additional wages and retained wages. "As can be seen from these provisions, confidentiality fees are not part of the salary. If the employer's trade secrets really need special protection, it is recommended that the confidentiality fee be listed separately as an independent expense of the enterprise.

3. The provisions on restricted economic compensation clearly state that "it is agreed that the employee shall be given economic compensation after the termination or dissolution of the labor contract." In other words, severance compensation for a non-compete restriction can only be given after the termination or rescission of the contract, and if the expenses are paid in advance, it cannot be used as severance compensation for the non-compete.

1. How to deal with shareholders' violation of non-compete restrictions.

1. According to the provisions of the Labor Contract Law of the People's Republic of China, if the shareholders of the company violate the non-compete agreement, they shall pay liquidated damages in accordance with the provisions of the non-compete agreement, and compensate for the losses caused to the company.

2. Legal provisions: Labor Contract Law of the People's Republic of China

Article 23 The employer and the worker may stipulate in the labor contract to keep the employer's trade secrets and confidential matters related to intellectual property rights.

For employees who are obliged to maintain confidentiality, the employer may stipulate a non-compete clause with the employee in the employment contract or confidentiality agreement, and stipulate that after the termination or termination of the labor contract, the employee will be compensated monthly during the non-compete period. If the employee violates the non-compete agreement, he shall pay liquidated damages to the employer in accordance with the agreement.

Article 90 Where a worker terminates a labor contract in violation of the provisions of this Law, or violates the confidentiality obligation or non-competition restriction stipulated in the labor contract, causing losses to the employer, he shall be liable for compensation.

In accordance with Article 23 of the Labor Contract Law, the employer and the employee may agree in the employment contract to keep confidential the employer's trade secrets and confidential matters related to the intellectual property rights of the knower.

For employees who are obliged to maintain confidentiality, the employer may stipulate terms and conditions with the employee in the labor contract or confidentiality agreement, and stipulate that after the termination or termination of the labor contract, the employee will be granted monthly during the non-compete period. If an employee violates the non-compete agreement, the employee shall be paid to the employer in accordance with the provisions of the agreement, and the economic compensation shall be paid to the employee on a monthly basis during the non-compete period after the termination or termination of the labor contract.

Before the implementation of the Labor Contract Law, the practice was usually to start issuing the non-compete clause at the same time, that is, as a basic condition for the agreement to take effect, the enterprise must make economic compensation for the employee's non-compete behavior, and the non-compete agreement must specify the amount of compensation and the method of payment at the same time, otherwise the agreement is invalid.

It is an obligation clearly stipulated in the law for the employer to pay non-compete compensation to the employee, and if the employer does not actively perform its obligations, the employee can also use this as a reason for not performing the non-compete obligation.

1. What is the standard of non-compete compensation?

The payment of non-compete severance compensation is not only mandatory by law, but also has the content agreed upon by both parties, and sometimes it can be resolved through judicial rulings. The law does not clearly stipulate the determination of the amount of compensation, but the two parties may negotiate and agree that it can be determined based on the employee's salary standard for nearly one month before leaving the company by the number of years of non-competition. Specifically, it can be understood from the following three aspects:

1. The payment time is statutory. The law clearly stipulates that the payment of non-compete compensation shall be made after termination or rescission. For example, Article 16 of the Regulations of Shanghai Municipality on Labor Contracts stipulates that for an employee who is obliged to keep trade secrets, the parties to an employment contract may stipulate a non-compete clause in the employment contract or confidentiality agreement, and stipulate that the employee shall be given economic compensation after the termination or dissolution of the labor contract.

It is a mandatory provision of the law to provide economic compensation to the employee after the termination or dissolution of the labor contract, and the law has already given a mandatory definition of the time for the payment of economic compensation agreed upon by the parties.

2. The payment standard and payment form belong to the agreed content. What the parties may agree on is the standard and form of payment of severance payments. Where there is an agreement between the employer and the employee who has the obligation to keep the employer's trade secrets on the standard and form of payment of severance in the non-compete agreement, the agreement shall prevail.

3. If there is no agreement on the payment standard, it may be determined at the discretion of the processing agency. Where there is no agreement on the form of payment of severance payments, the form of payment is a one-time payment.

The standard of compensation for non-compete is as follows: Non-compete is a means of protecting trade secrets by restricting the right of employees to freely choose employment to a certain extent, including both incumbent and former employees. For in-service employees, non-compete is an implied legal obligation, while for departing employees, it must be set up in the non-compete agreement, and the signing of the non-compete agreement is generally at the cost of the employer paying a certain amount of compensation.

The payment of non-compete severance compensation is not only mandatory by law, but also mainly by agreement, supplemented by statutory provisions. Specifically, it can be summarized from the following three aspects: 1. There are clear provisions in the statutory law on the payment time, that is, the payment of non-compete compensation shall be made after the termination or dissolution of the labor contract.

Paragraph 2 of Article 32 of the Labor Contract Law stipulates that for an employee who is obliged to maintain confidentiality, the employer may stipulate a non-compete clause with the employee in the employment contract or confidentiality agreement, and stipulate that after the termination or termination of the labor contract, the employee shall be compensated monthly during the non-compete period. We believe that "stipulating that the employee shall be given economic compensation after the termination or dissolution of the labor contract" is a mandatory provision of the law, and the law has already made it mandatory for the parties to agree on the time for payment of economic compensation. 2. Payment standards and payment formsChina's laws and regulations on labor do not clearly stipulate the compensation standards and payment methods for non-compete restrictions, which are only supported by judicial interpretations.

Therefore, the parties can agree on the standard and form of payment of severance payments, and if there is no agreement or the agreement is unclear, the judicial interpretation shall apply. 3. There is only a judicial interpretation of the payment standard, and the law does not clearly stipulate that according to the relevant judicial interpretations of the trial of labor dispute cases in China, the parties have agreed on a non-compete restriction in the labor contract or confidentiality agreement, but have not agreed to give the employee economic compensation after the termination or termination of the labor contract, and the employee has fulfilled the non-compete obligation and requires the employer to pay the employee 30% of the average salary of the employee in the 12 months prior to the termination or termination of the labor contract on a monthly basis.

Legal basis: Article 32 of the Labor Contract Law of the People's Republic of China.

What is the standard of non-compete compensation?

The standard of non-compete compensation is 30% of the average salary of the employee in the 12 months prior to the termination of the contract. As a basic condition for the non-compete agreement to take effect, the enterprise must make economic compensation for the employee's non-compete behavior, and the amount of compensation and the method of payment must also be specified in the non-compete agreement, otherwise the agreement is invalid.

Article 6 of the Interpretation (IV) on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Banquet and Burial Cases provides that the parties have agreed on a non-compete restriction in the labor contract or confidentiality agreement, but have not agreed to give the employee economic compensation after the termination or termination of the labor contract, and the employee has fulfilled the non-compete limit.