China tightens loophole on hiring temporary workers

Fri Dec 28, 2012 6:59am EST
 

BEIJING (Reuters) - China amended its labor law on Friday to ensure that workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.

Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers' health insurance and social security benefits and makes firing very difficult.

"Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs," the amendment reads, according to the Xinhua news agency. It takes effect on July 1, 2013.

Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories, and in some cases account for well over half.

Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.

Under the amendment, "temporary" refers to durations of under six months, while supplementary workers would replace staff who are on maternity or vacation leave, Kan He, vice chairman of the legislative affairs commission of the National People's Congress standing committee, said at a press conference to introduce the legislation.

The main point is that contracting through agencies should not become the main channel for employment, he said, acknowledging that the definition of backup might differ by industry.

"In order to prevent abuse, the regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim," Kan said.

"The majority of workers at a company should be under regular labor contracts."   Continued...

 
A worker welds steel bars at a construction site for a new train station in Ningbo, Zhejiang province, December 6, 2012. REUTERS/China Daily