WUHAN - Hundreds of thousands of catering industry employees in Wuhan, capital of Central China's Hubei province, may soon receive more pay because of a contract recently signed by members of a local labor union and their employers.

If the agreement wins the approval of local government officials, about 450,000 workers in the industry will receive a monthly minimum salary that is 30 percent higher than the minimum wage paid in the city. They will also be able to expect at least a 9 percent increase in their wages within a year, according to the contract signed on April 23.

It sets the pay of employees in downtown Wuhan at no less than 1,170 yuan ($180) a month and that for their counterparts in suburban areas at no less than 975 yuan a month.

The current minimum monthly salary for city residents who work in urban areas is 900 yuan, while that for those working in suburban areas is 750 yuan.

The contract also sets minimum salaries for chefs, waiters, dishwashers and seven other types of employees.

And it stipulates that workers should not work more than an hour of overtime a day unless special circumstances create an urgent need for their labor. Even then, they should work no more than three hours of overtime a day and should never be asked to do something that would put their health at risk.

The contract also says workers should not have more than 36 hours of overtime in a month and should enjoy at least one day off each week.

"The negotiation over this contract is historically significant because it would give nearly 500,000 employees in the catering industry in Wuhan a foundation for the protection of their rights," Zhou Guohua, deputy head of Wuhan Labor Union Federation of Trade, Finance and Tobacco, who represents the catering workers, was quoted by Guangzhou Daily as saying.

Some in the catering industry had little to say about the negotiations.

"I've heard about the news but have not received any notice from the local labor authority," said a woman surnamed Li, who runs Yongchang Restaurant in the city.

Others thought their businesses would be harmed.

"The prices of supplies are now rising and I will feel even greater pressure if I have to pay more money to my employees," she said.

Liu Guoliang, head of Wuhan Catering Association, who represents employers, said union officials submitted the contract to the Wuhan bureau of human resources and social security on April 23 and are now waiting for an approval.

Liu Qixin, deputy head of Wuhan Federation of Labor Unions, said there are nearly 40,000 catering businesses in the city, 84 percent of which are small or medium-sized. Such businesses tend to pay employees as they see fit and do little to protect workers' rights.

In Wuhan, workers in the catering industry earn wages that are low when compared with the pay that goes to workers in other industries. As a result, the industry finds itself having to cope with a serious labor shortage, he said.

Liu Guoliang said some restaurant owners at first strongly opposed the contract because they could not get comfortable with the thought of paying the wages demanded by workers.

Both sides in the negotiations later agreed to compromises, he said.

Liu said about 40 percent of the large and medium-sized catering businesses in Wuhan pay wages that are higher or equal to the amounts called for by the contract, while the rest will have to pay more if the agreement is approved.

"In the short run, some small enterprises, around five percent of the total, which pay low wages to their employees and are prone to business risks, would possibly close down," he said. "But the contract would go far to improve the management of the industry and alleviate the labor shortage."

Authorities with the local labor union said they will carry out spot checks to ensure the terms of the contract are being abided by. They said the names of violators will be placed on a blacklist.

During the next three years, the All China Federation of Trade Unions plans to bring collective bargaining over wages to all businesses in the country.