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Human Resources and Payroll in China 2016-2017 (5th Edition) -
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10% Limit
The Interim Regulations stipulate that the number of total dispatched employees used by an
employer should not exceed 10 percent of its total number of employees, including regular
employees and dispatched employees. Representative Offices of foreign enterprises, however, are
not subject to this restriction on dispatched employees’ positions.
In the event that the number of dispatched employees exceeds this limit before the effective date of
the InterimRegulations, the employer must reduce the proportion of dispatched staff to 10 percent
within two years of the effective date of the provisions. That two year period expired in March, 2016,
and so all FIEs, excluding ROs, must now be fully compliant with the new policy.
Contract Signing
Labor Contract between theDispatchingCompany and theDispatchedEmployee
According to the Interim Regulations, the contract signed between the labor dispatching company
and the dispatched employee should have a fixed employment term of at least two years. The
previous draft allowed non-fixed period labor contracts.
The dispatching company may arrange a probationary period of employment with the consent
of the dispatched employee. However, such probationary periods are only allowed once for each
dispatched employee.
Dispatching Contract between the Dispatching Company and the Host Entity
The InterimRegulations addseveral essential items required for drafting thedispatchingcontract between
the dispatching company and the employer (i.e. the host entity). Below is a list of all the essential items:
• The title and type of the dispatching position (temporary, auxiliary, or replaceable).
• The location of work.
• The number of dispatched employees and the allotted time.
• Payment amount determined in accordance with the “equal pay for equal work” principle.
• The payment method and the amount of social insurance premiums.
• Work hours and vacations.
• The relevant treatment for work injury, maternity leave and illness.
• Work safety and hygiene, and other relevant training.
• Financial compensation.
• The valid term of the dispatching contract.
• The payment method and the standard of dispatching service fees.
• The penalty for violating the dispatching contract.
• Other required items.