China: Multiple departments, Including the Ministry of Human Resources and Social Security, Formulated the System for Preventing and Eliminating Risks of Mismanagement in the Workplace (Reference Text)
Authors: Carol Zhu and Lynsey Liu
On 17th August 2023, in accordance with the Labour Law of the People’s Republic of China, the Labour Contract Law of the People’s Republic of China, the Criminal Law of the People’s Republic of China, the Resident Identity Card Law of the People’s Republic of China, and other relevant laws and regulations, the System for Preventing and Eliminating Risks of Mismanagement in the Workplace (Reference Text) (the “Reference Text”) was formulated for the guidance of employers to perfect the relevant in-house policies or for reference when signing employment contracts and collective contracts with their employees. Employers may further refine the content of the Reference Text in accordance with local regulations and the actual situation. The specific requirements of the Reference Text are as follows:
(1) Employers should inform employees about working conditions and hazards, sign employment contracts, and not withhold their identity cards or restrict their movement; (2) Overtime should be arranged legally, and wages should be paid on time. If an employee causes financial losses to an employer due to his/her own reason, compensation can be deducted from the employee’s salary in accordance with their agreements, but the monthly deduction shall not exceed 20% of the employee’s monthly salary; (3) Upon contract termination, employers should pay salary and compensation in one lump sum, issue a separation certificate, and handle necessary paperwork within 15 days; (4) Forced labour by threat of violence is prohibited; (5) Employers shall post the Reference Text and provide feedback channels; (6) Employers shall provide training for employees regarding the Reference Text and establish a supervision team; (7) Problems should be resolved according to laws and regulations and by consulting with employee representatives.
Key Action Points
The Reference Text sheds light on the specific requirements that employers shall observe in all stages of recruitment, entry procedures, overtime work, payment of wages, and termination of employment contracts, including establishing a supervision and inspection mechanism, preventing and resolving the risks of mismanagement of labour, and building a harmonious and stable labour relationship.