China amended its labor law yesterday to ensure that workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.
Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers’ health insurance and social security benefits and also makes firing them very difficult.
“Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs,” the amendment reads, according to Xinhua news agency. It takes effect on July 1.
Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories and in some cases account for well over half
Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.
In theory contracted workers should be paid the same, with benefits supplied by the agencies who are legally their direct employers.
However, in reality many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.
Employment agencies have been set up by local governments, and even by companies themselves, to keep an arms-length relationship with workers.
Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through the agencies.
Korean electronics giant Samsung Electronics said last month that it would require its 249 supplier factories in China to cap the number of temporary or contracted workers at 30 percent of regular full-time employees.
It announced the corrective measure after Chinese labor activists reported violations of overtime rules and working conditions as well as under-age workers at Samsung suppliers.
Samsung says its own audit did not find workers under China’s legal working age of 16 and therefore it had not violated any of China’s employment regulations..