China Issues Regulations on Foreign Labor Service Cooperation

In order to regulate foreign labor service cooperation and legitimatize laborers’ rights, China’s State Council approved the “Administrative Regulations on Foreign Labor Service Cooperation ([2012] No. 620, hereinafter referred as the ‘Regulations’)” on May 16. The Regulations will come into effect on August 1, 2012.

In accordance with the relevant laws and regulations, the following conditions shall be met by the enterprise when applying for the foreign labor service cooperation business qualification:

• The enterprise’s legal representative shall meet the conditions in accordance with the law
• The enterprise’s paid-up registered capital shall not be less than RMB6 million
• The enterprise shall have three or more people familiar with foreign labor service cooperation
• The enterprise shall have a sound internal management system and an emergency management system
• The legal representative shall not have a criminal record

After obtaining the foreign labor service cooperation business qualifications, an enterprise shall not allow other entities or individuals to organize labor service personnel to work abroad on the enterprise’s behalf. Also, activities that harm national security, or activities related to gambling and pornography, will not be tolerated. Enterprises shall provide training to laborers with regards to the necessary vocational skills, language skills and relevant laws and customs of the particular country/region.

In addition, the written labor service cooperation contract is strongly emphasized by the Regulations. To protect laborers’ rights and interests, the foreign labor service contract shall include the following matters:

• The content of the work, work location, working time and vacation period
• The term of the contract
• Labor remuneration and payment methods
• Laborer’s social insurance
• Laborer’s working conditions, labor protection, vocational training and occupational hazard protection
• Laborer’s benefits and living conditions
• Laborer’s personal insurance accident insurance
• Financial compensation for labor contract termination by the employer
• Assistance and rescue due to emergency
• Breach of contract

The foreign labor service cooperation and labor personnel shall abide by the contract and strictly fulfill the obligations.

Fines
Under the following circumstances, a fine of between RMB50,000 and RMB100,000 will be imposed on the enterprise:

• The enterprise failed to provide proper training
• The enterprise failed to purchase personal accident insurance
• The enterprise failed to accommodate management arrangements

Under the following circumstances, a fine of between RMB100,000 and RMB200,000 will be imposed on the enterprise:

• The enterprise failed to draw up a labor contract with the foreign employer
• Violation of the regulations, conduct contract with unapproved foreign employer or individual
• Provide false information
• The enterprise failed to provide timely support when an emergency occurred
• The enterprise failed to provide further arrangements to laborers when terminating the foreign labor service cooperation contract

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