China’s Proactive Employment Law Foreign Employers Must Understand part 2

China’s Patent Law

A foreign employer must follow all the legal responsibilities stated in the China employment law. It is a piece of golden advice to all foreign employers to keep an experienced China attorney by their side all the time for proper understanding and complying with China employment law.

China has a proactive employment policy to make sure the unemployment rate within a socially tolerable range. From hiring to termination, China employment law covers everything. Foreign companies need to understand the Chinese employment law thoroughly before taking on any decisions regarding their China employee.

China employment law basically involves the following areas

  • Employment Contracts
  • Remuneration or Salary
  • Workplace Safety
  • Procedures for Negotiations
  • Labor Disputes
  • Working Hours
  • Protection from Discrimination
  • Compensation or Wage Regulations
  • Training
  • Social Insurance

 

On February 7, 2020, the PRC Ministry of Human Resources and Social Security has issued the Opinions on Stabilizing Employment Relationship during the Period for Prevention and Control of the Novel Coronavirus-infected Pneumonia Epidemic to Support Enterprises in Resuming Work and Production (the “Opinions”). Local regulators have issued various similar notices in this regard in Shanghai and Guangdong province. A foreign employer must follow all the legal responsibilities stated in the China employment law. The two China employment laws that all foreign investors must consider before commencing a business in the country are:

 

  • 1995 Labor Law of the People’s Republic of China
  • 2008 Labor Contract Law of the People’s Republic of China

 

Few key points of China employment law

  • In China, labor relationships may be reinstated even after termination– employers may be forced to re-hire terminated employees.
  • The Chinse labor law is primarily based on employment contracts. Oral assurance and offer letters are not valid documents to establish labor relationships.
  • The severance pay structure in China is quite peculiar. Sometimes a senior manager’s severance cost is lower than a junior employee.
  • PRC lifts restrictions on wholly foreign owned HR service companies and the Ministry of Human Resources and Social Security issues notice on electronic employment contracts.
  • China takes steps to reduce employer’s contributions to disabled persons’ protection funds and Guangzhou issues guiding opinion on employment disputes.

 

In spite of not willing to violate China’s overtime laws, many foreign companies frequently break it largely because of the China labor laws are incredibly complicated and most English language translations of them are woefully inadequate. Appointing a trusted China business lawyer can solve this problem. It is a piece of golden advice to all the foreign employers to keep an experienced China attorney by their side all the time.

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Notable Changes in the China Employment Law Since COVID-19

After the outbreak of the Corona pandemic, new policies, laws, and regulations have been introduced by the Chinese government. The changes are aimed at properly handling the issues related to employment that emerged as the natural outcome of the COVID-19 outbreak. The Chinese government has realized that measures for economic reactivation should follow a job-rich approach, backed by stronger employment policies and institutions, better-resourced and comprehensive social protection systems.

 

Generally, under the People’s Republic of China (PRC) law, an employment contract can only be terminated based on certain limited grounds. Different legal requirements will apply to terminations based on those different grounds. The current COVID-19 pandemic situation does not remove or mitigate these. There has been no emergency relief from these requirements and we do not expect there to be any.

 

China Employment Laws

China employment law basically involves such issues as employment contracts, remuneration or salary, workplace safety, procedures for negotiations, labor disputes, working hours, protection from discrimination, compensation or wage regulations, training, social insurance, and other legal responsibilities the employer must follow according to law.

In order to materialize all these goals, Chinese authorities have brought in a few notable changes in the China labor and employment law. Dealing with employment relationships.  On February 7, 2020, the PRC Ministry of Human Resources and Social Security has issued the Opinions on Stabilizing Employment Relationship during the Period for Prevention and Control of the Novel Coronavirus-infected Pneumonia Epidemic to Support Enterprises in Resuming Work and Production (the “Opinions”). Local regulators have issued various similar notices in this regard in Shanghai and Guangdong province.

During the epidemic, many companies created a new form of recruitment to ease the pressure on labor costs. Enterprises with a labor shortage and those businesses with a temporary labor surplus due to suspended or reduced operations were able to share their workforce. To some degree, this has been a win-win solution as it improves the efficiency of human resources allocation.

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