On July 29, the Administrative Office of the All-China Federation of Trade Union (“ACFTU”) released the Notice on Strengthening the Administration of the Revenues and Expenditures of the Fund of the Local Trade Unions (“Notice”), stipulating that the Trade Union Fund may be used for employees' training, recreation and sports, propagandas, etc..

In addition, the Notice lists circumstances where the Trade Union Fund shall not be employed, including:

  • Trade Union Fund shall not be used to purchase shopping cards or vouchers, or to treat guests with dinners or gifts;
  • Trade Union Fund shall not be used for distributing allowance, subsidy or bonus in an abuse way;
  • Trade Union Fund shall not be used to pay for high-consumption recreations or fitness;
  • The administration department shall not fund a hidden coffer with the Trade Union Fund;
  • The trade union account shall not be incorporated into the unit’s administration account;
  • Trade Union Fund shall not be held back or misappropriated;
  • Trade Union Fund shall not be used in illegal fund-raising or any guaranty for such practice; and3
  • Trade Union Fund shall not be used for expenditure reimbursement unrelated to trade union activities.

KWM Comments: The administration of collection and expenditures of the Trade Union Fund has become a key area supervised by the ACFTU and the Ministry of Finance. When employers are tailoring their employee welfare programs, they should also pay attention to the legality of relevant policies and the compliance of correspondent financial operation.