New rules have been introduced to allow low-paid workers to discuss wage increases with their employers, the Shanghai labor department said yesterday.

The regulations will this year apply to workers at 75 percent of all State-owned enterprises (SOEs) and 60 percent of those in other companies that have a labor union.

One of the new rules, effective immediately, allows SOE employees who earn less than one-10th of their boss' salaries to request pay raises.

The new rules aim to reduce grave income disparities among employees.

They state that if more than 50 percent of employees make less than Shanghai's average monthly salary - 2,892 yuan ($410) - or, if more than 30 percent of employees make only the minimum wage, which was last Tuesday increased from 840 yuan to 960 yuan per month, a formal discussion about wages must take place.

Enforcement of the new rules is particularly acute for intensive-labor workers, who are paid by the numbers of products they produce.

The department said labor discussions must fairly represent both sides' interests. A company executive, employees and work union must all be included in the talks.

The subsequent report must include the company's profile, attendees and the signed agreement.

If involved parties can't reach an agreement, new discussions must be arranged. General workers' rights' guidelines have been in place for years, and the labor bureau said the new rules are meant to encourage employees to set up talks with employers.

Liao Mingtao, a labor dispute lawyer with M&A Law Firm, said it is was good to have discussions, but doubted they would lead to pay rises.

"Labor unions are a major player in such discussions," he said.

"But in China, the union is part of a company, and most of its staff are designated by the employer. Under such circumstances, they hardly dare challenge their employer."

Professor Zhong Renyao from Shanghai University of Finance and Economics disagreed.

He said the new rules are designed to offer protection to employees in situations where they would otherwise be treated unfairly.

A survey last year of 250 enterprises found more than half of the workers had not received a raise in the previous three years, with some saying they had not had an increase for six years.

Figures from 2006 show that more than 42 percent of low-level employees at SOEs had not received a pay raise since 2002.