Within the space of two months, the China Ministry of Human Resources and Social Security (MHRSS) has issued 3 successive regulations aimed at strengthening enforcement of labor laws and regulations and ensuring companies' compliance with them. Under these new regulations, random checks will increase, companies will be rated on their compliance with labor laws and severe violations will be published. These regulations are targeted to take effect from the beginning of 2017.
The 3 new regulations are:
- The Interim Measures for Publishing Serious Offences Against Labor Protections Laws (Draft) (the Publishing Measure), which proposes a "name and shame" scheme, in which cases of violations of labor law that result in serious consequences will be published in the mainstream media;
- The Measures for the Rating of Enterprises' Labor Law Compliance (the Rating Measure), under which companies will be given a ratings on their compliance with labor laws and regulations, which rating will be used in follow-up enforcement actions and will be shared with other government departments and union organizations; and
- The Notice on the Promotion of Random Checks in the Regulation of Human Resources and Social Security Matters (the Random Checks Notice), under which a system of random checks and inspections on a wide range of labor and social security law compliance areas will be set up and strengthened.
The above new regulations will likely mean strengthening of labor law enforcement and an increase in inspection frequency starting in 2017.
Companies with China operations are advised to conduct a comprehensive internal audit on their compliance with all areas of labor and social security laws and regulations to head off the risk of adverse findings in a future inspection by the labor bureau. Areas in which foreign companies may need to pay particular attention to include compliance with working hours, rest and leave, overtime pay, social insurance and labor dispatch regulations.
For details on how to handle audits by labor bureaus in China, please click here.
The new measures could also signal the beginning of the labor authorities' enforcement of the labor dispatch restrictions that were first released in 2013/14 but were not fully effective until early 2016 (click here for previous reports).
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