Workers quick to pick up on new LCL amendments

Following the recent amendment to the Labour Contract Law (LCL), the Ministry of Human Resources and Social Security (MOHRSS) issued the Notice on the Implementation of the Amended Employment Contract Law and Strengthening the Regulation of Labour Dispatch on 23 January 2013. According to the notice, MOHRSS and local labour authorities should take the following actions to further implement the amendment:

• MOHRSS will draft new implementing regulations on the use of labour dispatch and new measures regarding permit requirements for staffing agencies;
• local labour authorities should conduct surveys of the labour dispatch situation in their respective jurisdictions, as well as investigate and start correcting violations of statutory labour dispatch provisions; and
• local labour authorities must inspect licensed staffing agencies annually and revoke the permits of agencies that fail to pass the annual inspection.

On 19 April 2013, MOHRSS issued draft measures on permit requirements for staffing agencies, which were open for public comment until 19 May 2013. The draft measures stipulate the required documents and procedures for applying for a staffing agency permit, annual inspection procedures, and penalties for various types of violations. In addition, they stipulate that foreign investors may enter the labour dispatch business, but only in a joint venture with Chinese companies, and not in the form of wholly foreign-owned enterprises.

Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mail at: Zhang Danian (Shanghai) danian.zhang@bakermckenzie.com