China Employment Law Update
Written By
Executive Summary
- China improves the regulations on internships for vocational school students.
- China intends to set up a society credit system and Draft Measures for Rating of Enterprises' Labour Security Compliance Credit Issued for Comment.
- National Bureau of Statistics publishes 2015 Employed Citizens' Average Wage
Publication of Provisions on the Administration of Internships for Vocational School Students
On 11 April 2016, in a bid to avoid the phenomenon of a 'cheap labour force', the Ministry of Education of the People's Republic of China, together with four other departments, published Provisions on the Administration of Internships for Vocational School Students (the “Provisions”).
The Provisions impose a baseline salary for secondary and higher education vocational school students They also require employers to set a reasonable 'standard' salary for vocational students which must take into account the standard salary of a formal employee in the same circumstances, taking into account the position, workload, labour intensity and working hours etc. As a general rule, the standard salary for vocational school students should be no less than 80% of the salary standard for employees in the same position during the probationary period.
The Provisions also prescribe that the number of students in internships shall not exceed 10% of the employer's total workforce and shall not exceed 20% of the workforce undertaking any specific role. Vocational schools and employers are required to purchase liability insurance covering the students in accordance with relevant laws and regulations for the duration of their internship, which usually lasts for a period of six months. Despite the new rules created by the Provisions, regulations for university and college students taking up internships are still incredibly narrow and it is advisable to keep a close eye on this area for more comprehensive developments.
Draft Measures for Rating of Enterprises' Labour Security Compliance Credit Issued for Comment
Measures for the Rating of Enterprises' Labour Security Compliance Credit (Draft for Comment) (the "Draft Measures") closed to public comments on 20 May 2016. The Draft Measures were drafted by the Ministry of Human Resources and Social Security ("MOHRSS") to enhance the regulation of labour and employment classification and to improve the pertinence and effectiveness of labour security supervision and law enforcement.
As defined by the Draft Measures, the security compliance levels of enterprises are based on their compliance with labour security-related laws, regulations, and rules, which cover labour contracts, child labour prohibition, female and teenage employee protection, working time and statutory holidays, salary standard, social insurance, labour dispatch, etc.
Through the above evaluation of enterprises' performance for last year, the labour security compliance credit levels can be categorized into three levels: A-B-C. Those with Level A rating are deemed to have the best credit level, Level B rating is defined as normal and Level C ratings indicate dishonest enterprises. Enterprises at different Levels will receive different amounts of supervision from Human Resources and Social Security Authorities. Enterprises among Level A generally need not to participate in daily and annual inspections; those among Level B will be supervised to further improve their management of labour and employment, while those among Level C will be flagged as requiring supervision and will be inspected more frequently.
Source: Ministry of Human Resources and Social Security of People's Republic of China
Draft Measures for comments available here.
National Bureau of Statistics of the People's Republic of China Publishes Citizens' Average Wages from 2015
According to research published by the National Bureau of Statistics of China, the average wage of citizens employed by non-private sectors nationwide in 2015 was 62029 RMB (9490.44 USD). This figure shows an increase of 5669 RMB (867.36 USD) from 2014 with a nominal growth rate of 10.1%, accelerating 0.6% from 2014. On an inflation-adjusted basis, the real growth rate was 8.5%.
In 2015 the average wage of citizens employed in the private sector nationwide was 39589 RMB (6057.12 USD). This figure represents an 8.8% nominal growth rate with an increase of 3199 RMB (489.13 USD) from 2014, a deceleration of 2.5% from 2014. On an inflation-adjusted basis, the real growth rate was 7.2%.
For the purposes of the statistics, the average wage is equal to the total amount of wages received during the reported period (quarterly or annually) divided by the average number of the population for the same period. The total volume of wages is split into basic wages; merit pay, allowances and subsidies; and other wages. In 2015, a total of 1,600,000 entities in non-private sectors were under investigation, with 181,000,000 employees being surveyed. Only 600,000 entities in the private sector were under investigation, with the sampling ratio being 6.9%.
