Earlier this year, the PRC Ministry of Human Resources and Social Security (“MOHRSS”) issued a set of Measures for Evaluating Compliance and Integrity of Employers’ Labor Protection (《企业劳动保障守法诚信等级评价办法》). These Measures are set to take effect on January 1, 2017 and will apply to all China employers, domestic and foreign. So if have employees in China and you have not already done so, NOW is the time to ask yourself, do you feel ready?
Under these new measures all employers in China will be evaluated annually, and based on their legal compliance and any violation, they will be divided into 3 categories: A, B and C, with C being the lowest category. In conducting its evaluations, the relevant human resources and social authorities will consider all of the following
* whether the employer has formulated its internal labor protection rules and regulations
* whether the employer has executed employment contracts with every employee
* whether the employer is in compliance with labor dispatch laws
* whether the employer is in violation of the child labor laws
* whether the employer is in compliance with laws regarding female workers and underage workers
* whether the employer is in compliance with laws on working hours, rest time and leave
* whether the employer is in compliance with laws regarding employee remuneration and meets the applicable minimum wage standard
* whether the employer contributes all mandatory social insurance
* whether the employer is otherwise in compliance with labor protection laws and regulations
For employers in Category A, the frequency of administrative checks by the local labor authorities will be reduced, while the frequency of inspections for employers in Category B will be increased appropriately (whatever that means) and employers in Category C will become subject to the most scrutiny. Also for employers in Category C, the person-in-charge will be required to schedule meetings with labor authorities to be reminded of the importance of following labor protection laws. The evaluation results will be kept on file for a minimum of three years. You do not want to find yourself in Category C, or even B!
Also taking effect on January 1, 2017 is MOHRSS’ Measures of Public Disclosure of Significant Violations of Labor Protection Laws (《重大劳动保障违法行为社会公布办法》). Under these Measures, if a China employer commits a serious violation of Chinese labor and employment laws, it may be made public by the labor authorities. The following rulings/decisions on employer violations of China’s labor laws may become public:
* Failing to pay “substantial” employee remuneration
* Failing to pay employee social insurance and the circumstances are “serious”
* Violating the laws on working time or rest or vacation and the circumstances are “serious”
* Violating the special rules on protecting female workers and underage workers and the circumstances are “serious”
* Violating any child labor laws
* Causing significantly bad social consequences due to violations of labor laws
* Other serious illegal conduct
When publishing these labor law decisions, the following information will be released to the public (with exceptions for national security, trade secrets or individual privacy):
* The employer’s full name, integrated social credit code/registration number, and address
* The name of the legal representative or the person-in-charge
* The main facts of the violation
* The decision made by the authorities
This information will go into the employer’s credit file on integrity and legal compliance and may be shared with other governmental departments. China’s local human resources and social security bureaus will be responsible for clarifying and implementing these rules.
Bottom Line: Effective on the first day of January 2017, two important sets of rules will be implemented by MOHRSS to deter employers from violating China’s labor and employment laws and regulations. Go ahead and call these legal changes the China employment lawyers full employment act (as a couple of our clients already have), but just make sure you are in compliance and you stay in compliance,
Elite Stage is a platform that provides One-stop business Solution for start-ups and foreign enterprises, founded by Venture Capital and Elite Stage Consulting Company, individual Lawyer Partners andDeloitte Auditors. For over 8 years, Elite Stage successfully assisted more than 800 companies from all over the world with their China market entry.