Stricter control of HR compliance – get in line or get in trouble

freepik china flag It is time to get into compliance with your labor practices in China.

When the 2008 labor law was published it was as usual in China not fully enforced. Now, 9 years later the message from the PRC Ministry of Human Resources and Social Security (“MOHRSS”) is to get in line or get in trouble.

These Measures are set to take effect on January 1, 2017 and will apply to all China employers, domestic and foreign. So if you have employees or an operation in China and you have not already done so, now is the time to check that you are in full compliance.

Your local labor authorities will have the task to investigate all employers and rate them on an scale which will decide further inspection frequency.

Important criteria includes if there is an HR manual in the company defining its internal labor rules, labor contracts in place with 100% of the employees, compliance with rules on working times, overtime, female workers, underage workers and employer contributes all mandatory social insurances.

For serious violations the employer’s name, punishment and the name of its legal representative will be made public and also shared with governmental departments. China’s local human resources and social security bureaus will be responsible for clarifying and implementing these rules.

“ There are so many changes to the rules all the times that we recommend to do at least a yearly review of the HR manual. And if you don’t have an HR manual in place it is urgent to prepare one”, says Per Linden, CEO of Scandic Sourcing.

“Even if foreign companies generally comply better than many Chinese companies we can expect WOFE’s to get special scrutiny”, continues Mr. Linden.

Scandic Sourcing assist foreign companies with market entry, company formation, accounting, help to set up HR systems and act as outsourced HR directors.