Not Sure if You Have Heard, But China Has a NEW Labor Law, and you MUST comply

Friday, April 11, 2008 18:14
Posted in category Uncategorized

Sure, it was the much discussed topic last year, and since its January 1 implementation 14000 HK firms have said they will need to close from its increased cost (note: Nike says it still does not meet ILO standard).

But it appears that there are still some who haven’t caught up on their paperwork as Kraft and Wrigley have both been outed in the papers this week for potential labor violations.

For Kraft’s part, they:

Kraft Foods (China) Co. has been accused of violating the country’s new labor law for the decision of shifting its headquarters from Beijing to Shanghai without consulting employees.

Whereas Wrigley appears to have what could potentially be a more controversial process as one of their employees was a Hep B carrier whose job involved handling food items. After laying him off, he has fired back with a lawsuit using the new labor law verbage to back his claim:

According to China’s Labor and Employment Promotion Law which took effect on January 1, 2008, employers must not refuse to use workers who are infectious disease carriers, and China’s Ministry of Labor and Ministry of Health also asks employers to protect the interests of Hepatitis B virus carriers.

when attending the AMCHAM labor law reading last year, one member of the crowd mentioned that the only way he felt he would be able to fire companies was by claiming bankruptcy.. and with that in mind my suggestion before taking out the pink slip is to (1) do what you can to move people (2) work with the labor union and get their buy in (3) check with the local labor bureau and (4) READ THE TEXT OF THE LAW

Oh – you all know that you were supposed to send in your taxes last month right? If not, and you want to figure it out on your own (I suggest sending a self criticism with it since you are late) here is the form.

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3 Responses to “Not Sure if You Have Heard, But China Has a NEW Labor Law, and you MUST comply”

  1. Chris Devonshire-Ellis says:

    April 11th, 2008 at 11:45 pm

    Hi Rich, the IIT form you provided is for the Beijing tax bureau and won’t be suitable for filings in other locations. We provided forms online for 23 of the major cities in China, all downloadable for free here:
    http://www.china-briefing.com/news/2008/03/08/individual-income-tax-reports-must-be-filed-by-the-end-of-march.html

    It does astound me that so many people still didn’t get this done, and so many businesses don’t understand the new labor law. There’s plenty of free commentary about these subjects online, and firing people because they are ill is not going to fly in most civilised countries. You just can’t do that anymore. Sometimes advising foreign businesses in China feels like the old saying “You can lead a horse to water, but you can’t make him drink’.

  2. Rich says:

    April 13th, 2008 at 12:02 pm

    Looks like Kraft has settled out of court.

    Kraft strikes higher wage deal over move to Shanghai

  3. Chris Devonshire-Ellis says:

    April 14th, 2008 at 3:10 am

    Rich, I think 99.9% of these cases will get settled out of court. Labor dispute mediation is the domain of the company labor union, and they have the power of mediation right up to the NPC. That’s why companies have labor unions and this is why it is a mandatory requirement for employers and employees to fund them. It’ll be very rare for any cases like this to reach the courts. The relevant union level body will take care of labor dispute resolution. – Chris