China To "Name and Shame" Bad Employers

China To "Name and Shame" Bad Employers

China’s Ministry of Human Resources and Social Security has implemented two new labor regulations from January 01, 2017. The first measure seeks to “name and shame” companies which have a record of violating China labor laws. The second measure will result in grades attributed to companies as a measure of compliance.

The Ministry is hoping to expose both foreign and domestic companies which are known to violate China’s employment laws and regulations, including violation of payment of salary, overtime work, and required social security payments.

According to the China Supreme People’s Court, labor disputes accepted by the Chinese court system increased 25% in 2015, and the number continued to rise in 2016. Much of this is attributed to Chinese employees becoming more aware of their rights as employees granted under Chinese laws, along with an increased willingness to challenge employers.

For companies in “serious violation” of China employment laws, the new regulations will result in publication of the details of offending companies, including the company’s full name, address, registration number, name of the responsible manager of the company, and a description of the violations of the company.

Companies will further develop a record based on a history of compliance or non-compliance, and will be assigned a grade of A, B or C. C level companies, those with a record of legal and regulatory violations, will be routinely audited, and subject to additional scrutiny, including official inspections.

Now is the time to review your China company’s compliance. China compliance is no longer a perfunctory checking off a few boxes. Compliance requires a detailed plan and thought out approach, including a comprehensive review of the company’s operations and internal procedures. Lehman, Lee & Xu has well developed compliance systems to help you establish a strong foundation of compliance. You don’t want your company to be hit with a C.

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