China Employment Law. Watching A Bit Of The Sausage Being Made.

As the Chinese government starts taking its employment laws more seriously (at least with respect to foreign companies doing business in China), our China employment law work just keeps increasing, as does our blogging on it.  The below is an email from one of our China lawyers (who is doing China employment law about half time these days), with all possible identifiers removed or changed. We are sending a version of this email out a lot these days.

As noted in previous emails, employment law in China has been in a state of transition over the past few years. Though the relevant laws have not changed all that much, the implementation of those laws has changed quite a lot, and it  remains inconsistent throughout the country. Many of the granular issues, like overtime and working hours, are handled on a case-by-base basis by the relevant local labor bureau, which is why it’s so important that we contact them and explain the facts of each situation before moving forward.

Over the past few days we have spoken several times with the [Big China City] labor bureau, and, in particular the _________ District office, which is the office that handles applications and approvals for your WFOE’s employees. We explained your WFOE’s general approach to them, and we got the following clarification from them regarding  _______ District’s current practice regarding alternative working hours systems:

1.  Mr. Zhang’s [not real name] job position and salary make him theoretically eligible for the flexible working hours system. Other sales representatives employed by your WFOE (even those in ______) might also be eligible.

2.  We spoke with the supervisor of the _________ District labor bureau about the particulars of Mr. Zhang’s employment, and he indicated that there was a good chance Mr. Zhang would be approved to work under the flexible hours system.

3.  Your WFOE would need to obtain permission from the _________ District labor bureau BEFORE implementing the flexible working hours system.

4.   To implement the flexible working hours system, your WFOE would have to submit the following:

  • copies of the WFOE’s business license and organization code certificate
  • a list of employees working under the flexible working hours system
  • a summary of the work and rest schedule for such employees.

5.   The _______ labor bureau does not have a formal position on whether (or how) travel time would count as “working hours.” Their position is that the WFOE’s rules and regulations determine this issue, but the company must ensure that each employee’s workload is reasonable. The labor bureau declined to elaborate on the definition of “reasonable,” other than to say that “it is what a normal person could finish in a normal amount of time” and that “any application for the flexible working hours system would have to explain how each employee’s workload was reasonable.” This is pretty typical and we have quite a lot of experience with handling this.

6.   Your WFOE can prepare and submit this application itself or you can authorize one of our China lawyers to do it on your behalf.

7.   Upon receiving an application, the labor bureau will render an initial decision within 5 business days. However, the ______ District  supervisor indicated that much of the time, the bureau will issue a decision on the spot.

8.   The labor bureau will subsequently issue a formal decision. Any approval for the flexible hours working system will indicate the term of the approval, which can be for up to two years.

At this point, I suggest that you think about your approach to travel time and working hours for sales representatives and then we should discuss that. Depending on what you decide, we may want to add a line or two to Article _____ of your Rules and Regulations.

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