Frontline: China Employment Law Update November 2017

29 November 2017

Ying Wang

Executive Summary

  1. The new revision of the Anti-Unfair Competition Law of the People's Republic of China has been adopted, including provisions with regard to trade secrets, commercial bribery and other aspects.
  2. There have been updates to regional minimum monthly and hourly salary levels with a national average increase of 10.4%.


Revision to the Anti-Unfair Competition Law of the People's Republic of China

Due to rapid development, the existing PRC Anti-Unfair Competition Law was not fully capable of responding to various acts of unfair competition. In addition, the interrelation of the articles with other laws and regulations created the urgent need to revise the Anti-Unfair Competition Law. In order to conform to the trend of market development, the new revision to the Anti-Unfair Competition Law was adopted at the 30th Session of the Standing Committee of the 12th National People's Congress on November 4, 2017. The revision focuses on detailed methods and investigation procedures relating to acts of unfair competition as well as the corresponding punitive measures, which will come into effect on January 1, 2018.

The revision establishes several updates with regards to the following employment issues:

Trade secrets

  • A new definition in Article 9 has clarified that a trade secret is technical or operational information which has "commercial value". In contrast with the "economic benefits and practical value" definition in the 1993 revision, the new revision has removed the requirement of practicality to offer wider protection for the information owned by businesses. Thus, certain trade secrets which seemingly have no practical use, but which have potential economic value, may also be protected under this article.
  • Furthermore, the illegal acts that a third party knows or should know of when determining that party's infringement have been made clear, including acts of an employee or former employee of the right owner of trade secrets or any other entity or individual. In this event, although certain businesses may not have obtained trade secrets directly from the employee, they could be punished according to this article if the employee or former employee discloses the trade secret unlawfully.
  • More importantly, the cost of the penalty has increased significantly. Article 21 indicates that the penalty for violation of Article 9 will range from RMB 0.1 to 3 million. The maximum penalty has therefore increased considerably compared to the 1993 limit of RMB 0.2 million.

Commercial Bribery

  • The original clause of taking bribes and offering bribes has been deleted from Article 7 of the new revision to distinguish from the articles found in Criminal Law. More importantly, the new revision has added "to seek a transaction opportunity or competitive advantage" as the purpose of commercial bribery. This emphasises the competition requirement for this kind of bribe; bribes without such purpose or effect cannot be identified as commercial bribes even if they are made in the course of commercial activities.
  • In addition, the potential subjects of commercial bribery have been specified, namely:
  1. any employee of the counterparty in a transaction;
  2. any entity or individual entrusted by the counterparty in a transaction to handle relevant affairs; or
  3. any other entity or individual that takes advantage of their power or influence to manipulate a transaction.
  • A new clause states that any employee's act of commercial bribery shall be deemed to be an act of the business operator, unless there is evidence to the contrary. As a result, businesses should be concerned about the risk of being held liable for their employees' acts and pay more attention to the drafting of employment contracts in order to avoid any related risks.


Local Minimum and Average Monthly Salaries for 2018

On November 1, 2017, the Ministry of Human Resources and Social Security held a press conference for the third quarter of 2017. Human Resources Department spokesman Lu Aihong stated that at the end of October, a total of 17 regions nationwide had adjusted their minimum salary, with an average increase of 10.4%. The highest monthly minimum salary in the country is RMB 2,300 in Shanghai and the highest hourly minimum salary is RMB 22 in Beijing.

The table of monthly minimum salaries in different regions (as of November 2017) is as follows:

Note: The levels of the monthly minimum salary in some regions are determined by the level of local economic development and local living costs.

Region

Implementation date

New minimum salary levels in RMB

(monthly)

Level 1

Level 2

Level 3

Level 4

Level 5

Beijing

2017.09.01

2000

 

Shanghai

2017.04.01

2300

 

Guangdong

2015.05.01

1895

1510

1350

1210

 

Shenzhen

2017.06.01

2130

 

Tianjin

2017.07.01

2050

 

Hebei

2016.07.01

1650

1590

1480

1380

 

Shanxi

2017.10.01

1700

1600

1500

1400

 

Inner Mongolia

2017.08.01

1760

1660

1560

1460

 

Liaoning

2016.01.01

1530

1320

1200

1020

 

Jilin

2017.10.01

1780

1680

1580

1480

 

Heilongjiang

2015.10.01

1480

1450

1270

1120

1030

Jiangsu

2017.07.01

1890

1720

1520

 

Zhejiang

2015.11.01

1860

1660

1530

1380

 

Anhui

2015.11.01

1520

1350

1250

1150

 

Fujian

2017.07.01

1700

1650

1500

1380

1280

Jiangxi

2015.10.01

1530

1430

1340

1180

 

Shandong

2017.06.01

1810

1640

1470

 

Henan

2017.10.01

1720

1570

1420

 

Hubei

2017.11.01

1750

1500

1380

1250

 

Hunan

2017.07.01

1580

1430

1280

1130

 

Guangxi

2015.01.01

1400

1210

1085

1000

 

Hainan

2016.05.01

1430

1330

1280

 

Chongqing

2016.01.01

1500

1400

 

Sichuan

2015.07.01

1500

1380

1260

 

Guizhou

2017.07.01

1680

1570

1470

 

Yunnan

2015.09.01

1570

1400

1180

 

Xizang

2015.01.01

1400

 

Shaanxi

2017.05.01

1680

1580

1480

1380

 

Gansu

2017.06.01

1620

1570

1520

1470

 

Qinghai

2017.05.01

1500

 

Ningxia

2017.10.01

1660

1560

1480

 

Xinjiang

2015.07.01

1670

1470

1390

1310

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Authors

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Ying Wang

Partner
China and Hong Kong

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