Statutory economic compensation is paid based on the employee’s years of service with the employer at the rate of one month’s wage for each full year. A period of at least six months but less than one year is counted as one year; for less than six months, half a month’s wage is paid.

If the employee’s monthly wage exceeds three times the average monthly wage of employees in the locality for the preceding year, as published by the municipal people’s government, compensation is calculated at three times that average wage and is capped at 12 years.

Monthly wage means the employee’s average monthly wage during the 12 months before the employment contract was rescinded or terminated.