The Labor Contract Law, which took effect January 1 of last year, offers a series of protections for workers legislated in reaction to labor abuse within the Chinese factory system.
As Guamming Fang outline in her presentation, the planks of the new law include:
- Specific requirements for written contracts for all employees
- Regulations that effectively ban firing an employee without cause
- Aggressive severance policies covering most terminated employees
Almost a year into the new policy a number of changes in China's labor landscape were reported:
- 97% increase in the number of formal labor disputes
- Increase from 7 million to 27 million in the headcount of workers classified as temporary employees, and as such not initially covered by employment contract requirements
- In total, Chinese enterprises are estimated to absorb a 10 - 20% increase in their operating costs to comply with the new rules
You can view Ms. Fang's presentation in its entirety here.