New Rules Protecting Expats Chinese Working Abroad

August 24, 2012

Employment Law

 

China’s fast economy growth does not only attract foreign workers and companies, but it also encourages Chinese companies and employees to work abroad. Chinese enterprises are expanding their operations, setting up offices abroad and as consequence sending some of their staff overseas[i]. Until 2011, the number of Chinese workers abroad was 5.5 million among 16.000 Chinese companies with overseas operations. Expat Chinese workers abroad have been victims of violence, crime and other injustices which have raised concerns in the Government about the security risks for Chinese people working abroad[ii]. Consequently, some measures have been taken to tackle this problem. Recently, China’s State Council approved the “Administrative Regulations on Foreign Labor Service Cooperation ([2012] No. 620 which came into effect as of 1st August 2012[iii].

The regulation aims to protect the rights of Chinese workers sent overseas as well as to regulate the activities of enterprises offering foreign labor services. The most important aspects of the regulation are[iv]:

1. Foreign labor service cooperation business qualification

Strengthening of the conditions enterprises wishing to apply and obtain the ‘foreign labor service cooperation business qualification’, which allows companies to send Chinese citizens to work abroad, must comply with.

2. The creation of a fund for Chinese workers abroad

Companies holding the foreign labor service qualification must open a bank account, with a balance at least of RMB 3 Million (Approx. USD 476,190), in any bank designate by the authorities in order to cover any potential risk such as unpaid wages, services fees, compensation for losses or emergency expenses[v].

3. The establishment of compulsory contractual   conditions

The new regulations come to regulate the terms and conditions of the labor service cooperation contract in order to protect the worker´s right such as, for instance, clear specification of the type of work, work location, working hours and holidays; personal accident insurance; among others.

4. Fines

Companies who fail to comply with the new regulations will be subject to fines ranging from RMB 50,000 up to RMB 200,000.

We recommend to companies contacting a China law practitioner for further details and advice.


[i] The Economist, ‘Business in China and the West: A tale of two expats’ (29 December 2010), available at: http://tinyurl.com/2ukcds6 (last accessed 21 August 2012).

[ii]Jinglie, Wang, ‘Expat Security: The Growing Risks for Chinese Abroad’ http://tinyurl.com/cjz3vca (last accessed 21 August 2012).

[iii] China Briefing, China Issues Regulations on Foreign Labor Service Cooperation (15 June 2012), available at: http://tinyurl.com/9e7futy (last accessed 20 August 2012).

[iv]  What’s on Ningbo News, ‘China to implement regulations on foreign labor service cooperation on Aug 1’ (21 June 2012), available at: http://tinyurl.com/c7trq22 (last accessed 20 August 2012).

[v] Official announcement, ‘China issues regulations to protect overseas workers’ (12 June 2012), available at:http://tinyurl.com/ckutame(last accessed 20 August 2012). See also, China Daily News, Regulation Protects Expat Chinese Workers (12 June 2012), available at: http://tinyurl.com/8jjnd4j (last accessed 10 August 2012).

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