After an employee died, Shanghai’s labor protection department started investigation into Pinduoduo’s [PDD:US] working conditions, as reported by Shanghai Daily on January 4. On January 3, an inside source disclosed that a 22-year-old female employee of Pinduoduo died suddenly on her way home from work at 1:30 am on December 29, 2020, causing public concerns over the high-intensity work schedules adopted by the company. On January 4, Pinduoduo’s share price dropped 0.5% at the opening, and closed at USD166.78, down 6.13%.
China’s Labor Law, effective from January 1, 1995, prescribes that the working hours of an employee should not exceed an average of eight hours a day, or 44 hours per week. Also, employers are required to pay employees 50% more on overtime work during weekdays, with double pay on weekends and triple pay on public holidays. However, many Chinese tech companies fail in complying with such clauses, as there has been lax enforcement. According to a survey conducted by recruitment platform Zhaopin.com, over 80% of more than 11,000 respondents reported working overtime on a regular basis, while 70% said such hours were unpaid.
From an ESG perspective, Pinduoduo published its first ESG report in November 2020. In the report, Pinduoduo stated its employee base grew rapidly from 1,159 in 2017 to 5,828 in 2019. As for its talent policy, the firm claimed to prioritize a diversified and equal working environment, but it failed to report on its policy for employee health and safety, nor did it make any commitment to further address the issue. Pinduoduo also stated that it had a young employee base, with an average age of 27. Since 2017, the per capita productivity of its employees has more than tripled, hinting at the possibility of excessive working hours of employees. As a proof, according to Sixth Tone, a former Pinduoduo employee said long hours were not only the routine at Pinduoduo, but also a requirement.