With the deadly COVID-19 virus forcing businesses into shutdown mode, PRC labour laws are scrambling to regulate a new norm for work conditions and payment standards. Lesli Ligorner and Zhu Yuting explain
When the approximately 1.4 billion people in the People’s Republic of China were looking forward to their plans for the Chinese New Year holiday, which officially began on 24 January 2020, no one could have imagined that two months later there would be millions of factories closed or working with skeleton staff, millions of people locked down for more than six weeks in Hubei province, and few if any people out in the streets or the parks enjoying the plum and cherry blossoms that traditionally attract huge crowds at this time of year.
These are unprecedented times globally, but more particularly for a country like China, with a centrally planned economy that has been transitioning to a controlled market economy. The result has been numerous regulations that aim to shield the workforce from bearing the cost of the novel coronavirus disease called COVID-19, and the placement of these costs on employers, and on stabilizing the employment relationship.
More specifically, the central government has issued various regulations, at both national and local levels, to address employment issues such as the execution of the start of a new employment relationship, salary payment standards, conditions for companies resuming operations, and termination issues during this period. This article summarizes the more significant regulations related to these employment issues and provides insight for companies in China to resolve these issues during this challenging time.
Commencement of employment
During the pandemic prevention and control period, or the COVID-19 period, it has been more difficult for companies to execute an employment contract with employees. Generally, the employer and employee are required to execute two original employment contracts, with each party retaining a copy.
However, this has not been possible, as some employees cannot return to the office and sign the contract on site, either on their own behalf or as a representative of the employer, due to the COVID-19 situation.
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Lesli Ligorner is a partner and Zhu Yuting is an associate in the Beijing Representative Office of Morgan Lewis & Bockius