Is China’s New Labor Contract Law Getting Harmonized out of Existence?

As regular CLB readers know, we have been flacking China’s new labor contract law since even before its inception at the beginning of this year. Without a doubt, it has been one of our two or three most popular topics. To wit:

Must recently, in The Impact Of China’s Labor Contract Law, we discussed how the new law was influencing China’s labor situation.

We have talked so much about the labor law because it applies to every business in China with an employee. This is –by a wide margin — topic number one for our clients when they speak with the China lawyers at my law firm. We typically tell them that complying with the new labor law is relatively easy, but the penalties for failing to comply can be so harsh.

But last week, a long-time client of ours with a factory in Shandong Province (just outside Qingdao) told me of how a Chinese government employee had essentially told him not to worry so much about China’s labor contract law. The gist of the government employee’s statements to our client was that so long as this company did not lay off any of its approximately 250 Chinese employees, the government would look the other way regarding most other labor law violations. My client and I agreed it nonetheless needed to remain in strict compliance with the labor laws because it had nothing in writing from this one official who does not control everything in the province or the country relating to labor laws and because violations of China’s labor laws can lead not only to problems with the government, but to employee lawsuits.

I have since talked with a couple other of our Shandong Province clients and they report no such conversations, but they do say they have “heard” China’s labor laws surrounding everything but layoffs are being loosened.

What are you hearing?

Read More

Legal News