On June 22, the Ministry of Human Resources and Social Security (MOHRSS) promulgated the Implementing Measures for the Administrative Licensing of Labor Dispatch Services (the “Implementing Measures”). The Implementing Measures provide that as of July 1, 2013, no entity or individual may operate a labor dispatch business without an administrative license, including entities that operated such businesses before the Implementing Measures came into effect. The MOHRSS General Office also promulgated the Circular on the Implementation of Administrative Licensing for Labor Dispatch Services to enhance the supervision and management of labor dispatch enterprises.
A MOHRSS official confirmed that labor dispatch enterprises are considered employers subject to the Labor Contract Law. To regulate the labor dispatch system, MOHRSS must not only examine and approve the business qualifications of labor dispatch enterprises but must also enhance supervision of the performance of the labor law obligations and the protection of the legal rights of dispatched employees. In order to avoid the problems of “substituting approval for administration” and “approval without administration”, the Implementing Measures establish a regular reporting system under which labor dispatch enterprises must submit annual labor dispatch reports to the examination and approval authorities by March 31 of the following year. The examination and approval authorities examine the reports, supervise labor dispatch enterprises in accordance with the law, and file examination and supervision conclusions in the enterprise’s Business Credit Records.