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  • The Hidden Risk in ‘Proof of Income’

    The Hidden Risk in ‘Proof of Income’

    Yang was engaged in a labor dispute with Company A, and applied to the Labor Dispute Arbitration Committees (‘Committees’) for arbitration. Yang offered a ‘Proof of Income’ affixed with the official seal of Company A, and asked for corresponding salary and economic compensation. Company A, however, denied having issued such ‘Proof of Income’, and offered all pay sheets Yang signed to prove the unconformity between ‘Proof of Income’ and the fact. According to the Committees, Company A denied the authenticity of ‘Proof of Income’, but it failed to provide relevant evidence, so verdict was made based on ‘Proof of Income’. Company A refused to accept the verdict, and applied to the court for revocation of the aforesaid verdict. The court considered that although Company A claimed ‘Proof of Income’ to be false, it refused to apply authentication on such ‘Proof of Income’, so the court confirmed the authenticity of ‘Proof of Income’, and rejected Company A’s application.

    In this case, ‘Proof of Income’ and the pay sheets are both original copies, and relevant to the case, why do the Committees and the court prefer ‘Proof of Income’ as the evidence?

    According to Some Provisions of the Supreme People’s Court on Evidence in Civil Procedures, Article 65, in the circumstance where having two different evidences to the same object of proof, judicial organs should base on the actual circumstances of the case to decide whether the evidence provided by one side is obviously more competent than that provided by the other. In practice, most labor contracts only stipulate basic wage or salary package. The pay sheet or pay card detail can only reflect the actual payment to the employee, but can’t prove whether the salary has been fully paid. Under such circumstances, it’s relatively more possible for the judge to decide that ‘Proof of Income’ has more probative force.

    In practice, it’s very common for employees to apply for ‘Proof of Income’ in case of application for loan in house-purchasing, or application for a visa, and even application for a credit card. For various reasons, ‘Proof of Income’ usually surpasses the real income. However, the legal risk behind such ‘Proof of Income’ is very serious. Take house-purchasing for example, if an employee is unable to pay the loan, the company may be asked to undertake a joint liability.

    Therefore, to avoid such legal risk, it’s necessary for employers to treat ‘Proof of Income’ with discretion, and make sure the salary and term of such occupation recorded in it conform to the reality.