ecns [expanded by feedex.net]: New labor law to protect temp workers

ecns [expanded by feedex.net]

ecns

New labor law to protect temp workers
http://www.ecns.cn/cns-wire/2013/07-01/70994.shtml
Jul 1st 2013, 07:53



2013-07-01 16:53 Ecns.cn Web Editor: Mo Hong'e


(ECNS) ― The newly amended China Labor Contract Law, which stipulates that temporary workers are entitled to "equal pay for equal work," takes effect on July 1, according to reports on Monday.


Labor dispatch, also known as labor outsourcing, is a form of employment arrangement where an individual signs an employment agreement with a labor dispatch agency and is then dispatched to work in a third company, the hosting company or the real employer.


The newly amended Labor Contract Law stipulates that "dispatched workers are entitled to equal pay for equal work. In other words, they shall receive the same compensation, including basic salary, bonuses, subsidies and allowances, as received by regular employees."


It also requires employers to implement the same "labor remuneration allocation mechanisms" for dispatched workers as those applied to regular employees in the same positions.


The new law is expected to provide more effective and better protection to workers. According to the All-China Federation of Trade Unions, in 2011, there were about 37 million dispatched workers in China, accounting for 13.1 percent of all urban employees, and long-term labor dispatch arrangements are seen in a wide variety of positions, especially at state-owned enterprises and government agencies.


Implementing the rule of "equal pay for equal work" for temp workers is seen as a must for income distribution reform. However, analysts point out that as the new amendments do not include detailed rules for implementing the rule, the future for full implementation of the rule remains quite vague.


In practice, many companies sign labor dispatching contracts with their employees whose wages are in fact paid by labor dispatching agencies.


This kind of "fake dispatch, true employment" is rampant.


Experts say that many companies seem to take advantage of the loopholes regarding the use of temporary labor and pursue their own gains at the cost of workers' rights. The amended law is expected to help standardize such practices regarding temporary workers.


The newly amended law stipulates that starting July 1, a company providing labor dispatching services shall have a minimum registered capital of 2 million yuan (500,000 yuan is required under the current law), fixed office premises and facilities as well as management rules on dispatch laborers.


Further, it shall obtain administrative permission from the labor administration authority. A company that fails to get administrative permission will not be allowed to engage in labor dispatching services.


The amendments emphasize that labor dispatch may be used only for "temporary, ancillary or replaceable" positions.


The amendments also stipulate that more severe penalty be imposed for employers attempting to get around the requirements. Failure to comply could result in fines of 5,000 yuan to 10,000 yuan per worker.


Experts point out that many employers favor dispatch workers to avoid risks and lower labor costs. The new amendments encourage enterprises to adopt permanent employment to create a fairer and more reasonable work environment.


As the implementation of the amended labor contract law is expected to add labor costs to companies, it may trigger a large number of dispatch laborers being laid off.





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