Regulation on the Implementation of the Labor Contract Law of the People's Republic of China

Below you can find the translated English version of the Regulation on the Implementation of the Labor Contract Law of the People’s Republic of China. We also added a link to the original version for you to check.
Original version (Chinese): The Central People’s Government of the People’s Republic of China

Table of Contents

Chapter I General Provisions 

Article 1 For the purpose of implementing the Labor Contract Law of the People’s Republic of China (hereinafter “Labor Contract Law”), this Regulation is formulated.

Article 2 Organizations such as the people’s governments at all levels, the labor administrative departments of the people’s governments at the county level or above, and the labor unions shall take measures to promote the implementation of the Labor Contract Law and develop a harmonious labor relationship.

 Article 3 Accounting firms, law firms, and other partnerships and foundations that are legally founded are employers as defined in the Labor Contract Law (“Employers”).

Chapter II Conclusion of Labor Contracts

Article 4 A branch office established by an Employer which has obtained its business license or registration certificate according to law may conclude labor contracts with laborers as an independent Employer, or it may conclude labor contracts with laborers upon the authorization of its establishing employer if it has not obtained a business license or registration certificate.

Article 5 In the event that an Employer provides written notice to a laborer of the need to sign a written labor contract, and the laborer fails to conclude the said contract with the Employer within one month from the start of labor service, the Employer shall provide the laborer with written notification of the termination of the labor relationship. The Employer shall not owe any economic compensation to the laborer but shall pay the laborer remuneration for his actual working time.

Article 6 In the event that an Employer fails to conclude a written labor contract with a laborer who has provided labor service for more than one month but less than one year, it shall pay the laborer double monthly wages according to Article 82 of the Labor Contract Law, and shall conclude a written labor contract with the laborer. Where a laborer refuses to conclude a written labor contract with his employer, the employer shall terminate the labor relationship with written notification to the laborer, and make economic compensation to the laborer according to Article 47 of the Labor Contract Law.

The start time of the period, prescribed in the preceding paragraph, during which an employer is required to pay an employee his/her monthly wages in double amount shall be the first day following the full month employment, and the end time shall be the last day before the written labor contract is concluded.

Article 7 In the event that an employer fails to conclude a written labor contract with a laborer who has provided labor service for one full year, the Employer shall, in accordance with Article 82 of the Labor Contract Law, pay the laborer double monthly wages from the 1st day after a full month from the date when the laborer was recruited or began work for the Employer, whichever was earlier, up to a full year. It shall be deemed that the employer has concluded a non-fixed term labor contract with the laborer on the 1st day after a full year since the date when the laborer was recruited and/or started work for the employer, and a written labor contract shall be concluded with the laborer immediately.

Article 8 The recruitment register of employees as mentioned in Article 7 of the Labor Contract Law shall contain, inter alia, the laborers’ name, gender, citizen’s identity number, registered permanent residence address and current address, contact information, the form of employment, the start time of employment, and term of the labor contract.

Article 9 The start time of “a consecutive period of no less than 10 years”, as mentioned in Paragraph 2 of Article 14 of the Labor Contract Law, shall be the day when the employer officially started to use the laborer, including the time of employment before the Labor Contract Law came into force.

Article 10 In the event that a laborer is transferred to a new Employer for reasons not attributable to himself, the years he worked in the original Employer shall be consolidated into the service years he worked in the new Employer. If the original Employer has made economic compensation for the years he worked in the original Employer, the new Employer may not consider the years he worked in the original Employer when calculating economic compensation made to the laborer for termination of the labor contract.

Article 11 In the event that a laborer proposes the conclusion of a non-fixed term labor contract with the Employer under Paragraph 2 of Article 14 of the Labor Contract Law, the Employer shall conclude a non-fixed term labor contract with him, unless otherwise stipulated by both parties. The contents of a labor contract shall be determined by both parties under the principles of legality, fairness, voluntariness, unanimity through consultation and good faith. Any controversial content that the parties cannot reach consensus upon shall be settled according to Article 18 of the Labor Contract Law.

Article 12 For the public welfare posts arranged by the local people’s governments at various levels and the relevant departments of the local people’s government at the county level or above for people with employment difficulties which enjoy post-based subsidies and social insurance subsidies, the provisions of the Labor Contract Law concerning non-fixed term labor contracts and economic compensation are not applicable to the labor contracts for those posts.

Article 13 An Employer and a laborer may not agree upon any other condition for the termination of the labor contract beyond the circumstances for the termination of labor contracts as prescribed in Article 44 of the Labor Contract Law.

Article 14 In the event that the place where a labor contract is performed is not the place where the employer is registered, matters affecting the laborer such as the minimum wage standard, labor protection, work conditions, prevention against occupational harm and the local average monthly wages of the previous year shall be governed by the relevant provisions of the place where the labor contract is performed. If the relevant standards at the place where the employer is registered are higher than those at the place where the labor contract is performed and both the employer and the laborer have agreed on following the relevant provisions of the place where the employer is registered, the relevant provisions of the place where the employer is registered shall be applied.

Article 15 A laborer’s wages during a probation period shall not be less than 80% of the minimum wages for the same post in the Employer or 80% of the wages stipulated in the labor contract, and shall not be less than the minimum wage standard of the place of the Employer.

Article 16 The training expenses identified in Article 22 of the Labor Contract Law include the training expenses with vouchers spent by the Employer on providing professional technical trainings for a laborer, the travel expenses during the training, and other direct expenses spent on the laborer for the training.

Article 17 In the event that a labor contract expires before the term of service stipulated by the Employer and the laborer according to Article 22 of the Labor Contract Law has expired, the labor contract shall be performed until the expiration of the term of service, unless otherwise stipulated by both parties.

 

Chapter III Termination of Labor Contract

 

Article 18 A laborer may, according to the conditions and procedures prescribed in the Labor Contract Law, terminate a fixed-term labor contract, a non-fixed term labor contract, or a project-based labor contract which has a term measured by the completion of a specific amount of work, where:

 (1) the laborer and the Employer have reached a negotiated consensus;

(2)  the laborer has notified the Employer of the termination in writing 30 days in advance;

(3) the laborer has notified the Employer of the termination three days in advance prior to the expiration of the probation period;

(4) the Employer fails to provide labor protection and working conditions in accordance with the labor contract;

(5) the Employer fails to pay labor remunerations in full and on time;

(6) the Employer fails to pay social insurance premiums for the laborer in accordance with law;

(7) the rules and regulations of the Employer violate laws or regulations, thereby harming the laborer’s rights and interests;

(8) the Employer use such means as fraud, coercion or taking advantage of laborer’s unfavorable position to conclude or modify the labor contract against laborer`s genuine will;

(9) the Employer disclaims its mandatory liability and denies the laborer`s rights in the labor contract;

(10) the Employer violates the mandatory provisions of laws or administrative regulations;

(11) the Employer uses violence, intimidation or unlawful restriction of personal freedom to compel a laborer to work;

(12) a laborer is instructed in violation of rules and regulations or peremptorily ordered by his Employer to perform dangerous operations which will endanger his personal safety; or

(13) other circumstances under which the laborer can terminate the Labor contract as set forth in laws or administrative regulations.

Article 19 An Employer may, according to the conditions and procedures prescribed in the Labor Contract Law, terminate a fixed-term labor contract, a non-fixed term labor contract, or a project-based labor contract which has a term measured by the completion of a specific amount of work, where:

(1) the Employer and the laborer have reached a negotiated consensus;

(2) the laborer is proved not to satisfy the requirements of employment during the probation period;

(3) the laborer materially breaches the Employer’s rules and regulations;

(4) the laborer commits serious dereliction of duty or practices graft or corruption, causing substantial damage to the Employer’s interests; 

(5) the laborer has additionally established a labor relationship with another Employer which materially affects the completion of his tasks or refuses to rectify the matter when it is brought to his attention by the Employer;

(6) the laborer use means such as fraud, coercion, or taking advantage of the Employer’s unfavorable position to force the Employer to conclude or modify the labor contract against the Employer’s genuine will;

(7) the laborer is convicted for criminal liability  in accordance with the law;

 (8) the laborer is incapable of performing his original work or is incapable of performing a new job as arranged by the Employer after the regulated period of medical leave for an illness or non-work-related injury expires;

(9) the laborer is proved incompetent and remains incompetent after training or adjustment of his position;

(10) a major change in the objective circumstances relied upon at the time of conclusion of the labor contract hinders continued fulfillment of the original contract and, after consultations, the Employer and laborer are unable to reach an agreement on amending the labor contract;

(11) the Employer is being restructured according to the Enterprise Bankruptcy Law;

(12) the Employer encounters serious difficulties in production and/or business operations;

(13) the Employer changes its productions, makes important technological innovations, or adjusts the management operation style, and it is still necessary to lay off some laborers after modifying the labor contract; or

(14) other major changes in the objective economic circumstances relied upon at the conclusion of the labor contract render it non-performable.

Article 20 In the event that an employer decides to terminate a labor contract by paying the laborer an additional month’s wages according to Article 40 of the Labor Contract Law, the amount of the additional month’s wages shall be determined according to the laborer’s wages in the last month.

Article 21 A labor contract shall be terminated when a laborer reaches the mandatory age for retirement.

Article 22 In the event that a project-based contract is terminated upon the completion of said task, the employer shall make economic compensation to the laborer according to Article 47 of the Labor Contract Law.

Article 23 In the event that an Employer terminates its labor contract with a laborer who has suffered a work-related injury, the Employer shall, in addition to paying economic compensation according to Article 47 of the Labor Contract Law, pay work-related injury medical subsidies and one time disability employment subsidies according to the state provisions on work-related injury insurance.

Article 24 A certificate for the termination of a labor contract issued by an Employer shall specify the term of the labor contract, the date of termination, the position of the laborer, and the years of service to the Employer.

Article 25 In the event that an Employer terminates its labor contract with a laborer in violation of the Labor Contract Law, if it has paid compensation according to Article 87 of the Labor Contract Law, it is not required to make additional economic compensation. The years of service compensated shall be calculated from the day the laborer was recruited.

Article 26 Even if an Employer and laborer have agreed upon a term of service in the labor contract, and the laborer terminates the labor contract according to Article 38 of the Labor Contract Law, the laborer has not breached the agreement on the service bonding period, and the Employer is not entitled to ask the laborer to pay liquidated damages for breach of the agreement.

If an Employer terminates a labor contract which has stipulated the service bonding period, the laborer shall pay liquidated damages for breach of agreement to the Employer where:

(1) the laborer materially breaches the rules and regulations of the Employer;

 (2) the laborer commits serious dereliction of duty or practices graft or corruption, causing substantial damage to the Employer’s interests;

 (3) the laborer has established a labor relationship with another Employer which materially affects the completion of his tasks or refuses to rectify the matter when it is brought to his attention by the Employer;

 (4) the laborer uses means such as fraud, coercion or taking advantage of the Employer’s unfavorable position to force the Employer to conclude or modify the labor contract against the Employer’s genuine will; or

(5) the laborer is convicted for criminal liability in accordance with the law.

Article 27 According to Article 47 of the Labor Contract Law, the monthly wages for calculating the economic compensation to be paid to a laborer shall be gross pay, including the hourly wages or piecework wages and other monetary incomes such as bonuses, allowances and subsidies. If the average wages of the laborer in the 12 months before the labor contract is terminated are below the local minimum wages standard, the economic compensation shall be calculated based on the local minimum wages. If the laborer`s years of service are less than 12 months, the average wages shall be calculated based on the actual years of service.

Chapter IV Special Provisions on Labor Dispatch

Article 28 According to Article 67 of the Labor Contract Law, a labor dispatching company invested or established in the form of a partnership enterprise by a labor using party or its subsidiary may not dispatch any laborer to the labor using party or its subsidiary.

Article 29 A labor using party shall fulfill its obligations as stipulated in Article 62 of the Labor Contract Law and safeguard the legal rights and interests of the dispatched laborers.

Article 30 A labor dispatching company shall not hire a dispatched laborer for non-full-time labor use.

Article 31 Where economic compensation is to be paid upon the lawful termination of a labor contract by a labor dispatching company or a dispatched laborer, Article 46 and Article 47 of the Labor Contract Law shall be applied.

Article 32 In the event that a labor dispatching company illegally terminates its labor contract with a dispatched laborer, Article 48 of the Labor Contract Law shall be applied.

Chapter V Legal Liability

Article 33 In the event that an Employer violates the provisions of the Labor Contract Law on establishing a recruitment register of employees, the competent labor administrative department shall order it to rectify within a specified period of time, and, if the Employer fails to rectify the problem within the determined time limit, the competent labor administrative department may impose a fine of no less than RMB 2,000 and no more than RMB 20,000 on the employer.

Article 34 In the event that an Employer fails to pay a laborer double monthly wages or compensation where stipulated in the Labor Contract Law, the competent labor administrative department shall order it to make the payment.

Article 35 In the event that any labor using party violates the provisions of the Labor Contract Law or this Regulation on labor dispatching, the competent labor administrative department or other competent department shall order it to rectify the failure and, if the circumstances are serious, impose a fine of RMB 1000 to RMB 5000  per dispatched laborer. If any damages have been caused to a dispatched laborer, the dispatching company and the labor using party shall bear joint and several liabilities.

Chapter VI Supplementary Provisions

Article 36 For the complaints and reports on the violation of the Labor Contract Law or this Regulation, the labor administrative departments of the local people’s governments at the county level or above shall handle them according to the Regulation on Labor Security Supervision.

Article 37 In disputes concerning the conclusion, performance, modification, or termination of a labor contract between a laborer and an Employer, the Law of the People’s Republic of China on the Mediation and Arbitration of Labor Disputes shall be applied.

Article 38 This Regulation shall come into force on the date of promulgation.

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