CHINA: Annual Update – Expected Labour Law Changes in 2017
Two-Child Policy
Effect of the change to the ‘Two-Child Policy’: The PRC’s “One-Child Policy” has been replaced by the “Two-child policy” which incentivises citizens to marry earlier and have more children, as compared to the previous policy. In response, provincial governments have been amending their local family planning regulations, extending the length of marriage leave, maternity leave and paternity leave across 26 provinces and municipalities.
The nationwide Two-Child Policy came into effect on January 1, 2016
Action required:
(1) Keep abreast of the rules in your relevant locations.
(2) Amend existing employee handbooks to reflect the increased number of days of leave according to the particular province/municipal policy where the employer is located.
Annual Compliance Rating
Introduction of annual compliance ratings: The Ministry of Human Resources and Social Security and its local branches (“MHRSS”) will start to rate each company once each year based on its compliance with labour/employment law requirements in the previous year. Ratings will be A, B, and C, with A being the highest. To assign a rating, MHRSS will gather information about a company’s compliance status through routine on-site inspections, document reviews, labour complaints, etc. Enterprises at the different levels will receive different amounts of supervision from the labour authorities.
Effective from January 1, 2017.
Action required:
(1) Keep abreast of the current legal situation and be alert to potential routine inspections and subsequent supervision by local labour authorities.
(2) Review existing policies and procedures to ensure compliance with labour/employment law requirements.
(3) Keep a complete and written record of all HR related matters.
Publicity for non-compliance
Details of employer labour law breaches will be published: MHRSS will routinely publicize a list of those employers who are found to have committed any of the 7 types of material violations under PRC’s labour laws. The 7 categories focus mainly on employer’s failure to perform its statutory obligations, including default on social insurance contribution, overtime work, remuneration, etc. When found guilty, the employer’s name, address, its legal representatives, a summary of the violation and the penalties imposed will be published on MHRSS’ web portals, in major newspapers, on TV, etc.
Effective from January 1, 2017
Action required:
(1) Keep abreast of the current legal situation and be alert to the potential routine inspections and subsequent supervision by local labour authorities.
(2) Review and improve existing employment agreements, policies, and procedures and their implementation, to ensure full compliance with labour law requirements.
Internships
Obligation to pay interns: Student interns from secondary and/or higher education vocational schools must now be paid a baseline salary of no less than 80% of the salary of a formal employee holding the same position during his/her probationary period. The number of student interns cannot exceed 10% of the employer’s total workforce and employers shall purchase liability insurance for student interns during their internship.
Already in force.
Action required:
(1) Keep abreast of the current legal situation.
(2) Revise existing internship agreements and policies to ensure compliance with PRC labour law requirements.