The end of ‘996’? China’s government takes on its brutal tech working culture

Or at least they now have clearer legal claim against unpaid overtime. On Friday, China’s top court, the Supreme People’s Court, and the Ministry of Human Resources and Social Security jointly declared that China’s “996” working culture—the presumption that employers in China’s tech sector have the right to demand that employees work from 9 a.m. to 9 p.m. six days a week—is illegal.

“Legally, workers have the right to corresponding compensation and rest times or holidays,” the court said in a statement published on Friday. “Obeying the national regime for working hours is the obligation of employers. Overtime can easily lead to labor disputes, impact the worker-employer relationship and social stability.”

Outlawing 996 culture marks a significant shift in the strenuous working culture that some of China’s top tech companies have attributed to their success. At the same time, for China’s government the optics of a populist push may be as important as how the ban on 996 will be enforced. Cracking down on 996 culture is part of the ruling Chinese Communist Party’s broader campaign to reduce inequality in Chinese society and limit the power of the nation’s largest tech companies.

The law

The court issued its rule following a review of 10 court cases in which overworked employees had overtime benefits denied. In one case, an employee at an unnamed media firm died at the workplace after being forced to log long hours.

Bruce Pang, head of China macro and strategy research at China Renaissance Securities, notes that the court’s statement is not so much a new law as a signal that China will step up enforcement of existing laws.

The court did not restrict its judgment to the tech sector, but China’s tech giants are likely to be on high alert after years of popularizing 996 working habits.  “Today’s court-issued essay will likely be taken to heart by the entire tech industry,” says Brock Silvers, chief investment officer of Kaiyuan Capital in Hong Kong.

The 996 working habits have been intrinsic to the culture of Chinese tech firms like e-commerce firm Alibaba, social media giant Tencent, and Alibaba-rival JD.com, which often attribute their success, in part, to long hours logged by passionate employees. In 2019, Alibaba founder Jack Ma penned an essay calling 996 a “great blessing” and a necessary component to Alibaba’s rise.

“If we find things we like, 996 is not a problem,” Ma wrote. “If you don’t like [your work], every minute is torture.” 

But a growing chorus of critics has denounced 996 culture as a form of worker exploitation. Earlier this year, calls for reform spiked after two employees of e-commerce firm Pinduoduo died within the span of two weeks after logging heavy hours at the office. One collapsed and died after walking home from the office after midnight while the other committed suicide.

How it will work

There is a wide gap between the 72-hour workweek required under a 996 regime and the 44-hour workweek officially allowed under Chinese law. Pang says that if labor law is strictly enforced, employment in China’s tech sector could increase by as much as 30% as firms make up for the lost hours of overextended workers.

Dev Lewis, program lead at Digital Asia Hub, says it’s just as likely that firms will find new ways to keep their employees working long hours. “A ruling alone will not change a culture, especially one that is entrenched for several decades,” says Lewis. “The economic incentives remain the same, and companies tend to find creative loopholes.” 

China’s crackdown on 996 culture places the government firmly on the side of the workers against the country’s powerful tech giants, says Bo Zhuang, a China economist at Loomis Sayles.

Zhuang argues the court’s 996 ruling needs to be seen in the context of Chinese President Xi Jinping’s populist push, where the government has reduced the power of tech companies via sweeping antitrust regulations and called on the country’s elite to redistribute their wealth in a recently announced “common prosperity” campaign.

Zhuang says that the 996 court statement and other populist measures may, in part, be aimed at helping President Xi cement his power for a third term in the lead-up to next year’s National Party Congress. “China is rolling out populist policies, including tech crackdowns, including common prosperity…and labor protection is part of those measures,” says Zhuang. “President Xi wants to be more secure and therefore more popular.”

Silvers agrees. “Moves against 996 culture may be driven more by China’s own version of populist politics than by economic or regulatory rationale,” he says.