What are some of the legal requirements for a labour secondment arrangement?

1. Contractual arrangement

The Labour Provider (defined in the PRC bitesize article dated 17 September 2010) must enter into a labour secondment service agreement with the host employer, which provides for (among other things) the name of positions, the number of employees (“Seconded Employees”) who are seconded to work for the host employer, the term of the secondment, the amount and the method of payment of the remuneration and social insurance benefits to the Seconded Employees, and the liability for breach of the agreement.

The Labour Provider must sign a minimum 2-year labour contract with each Seconded Employee.

2. Equal pay for equal work 

Seconded Employees must be equally paid as employees directly employed by the host employer, provided that they are taking the same working post.

3. Host employer obligations

A host employer is prohibited from:

  1. dividing a continuous secondment period into several short-term periods;
  2. charging the Seconded Employees any fees;
  3. seconding the Seconded Employees to work for another company;
  4. engaging in business as a Labour Provider and providing Seconded Employees to itself or its affiliates; or
  5. obtaining any part-time employees through labour secondment arrangement. A part-time employee is one who, on average, works for not more than four hours a day a week and not more than an aggregate of 24 hours a week for the same employer.

4. Joint responsibilities

The Labour Provider and host employer are jointly and severally liable for any loss sustained by the Seconded Employee arising from any breach of legal obligations by either party.