Key Points:

  • Special work schedules apply to outsourcing services enterprises in 20 cities
  • Details on procedures and requirements published in Beijing and Jiangsu  

On January 15, 2009 the State Council approved Ministry of Commerce (“MOFCOM”) proposals on several policies supporting the development of China’s outsourcing services industry. One of the supporting policies permits qualified technically advanced outsourcing services enterprises (“TAOSE”) to offer special work schedules to their employees.

On March 29, 2009 the Ministry of Human Resources and Social Security (“MHRSS”) and MOFCOM jointly promulgated a MHRSS and MOFCOM Circular specifying that in the 20 model cities for outsourcing services (Beijing, Tianjin, Shanghai, Chongqing, Dalian, Shenzhen, Guangzhou, Wuhan, Harbin, Chengdu, Nanjing, Xi’an, Jinan, Hangzhou, Hefei, Nanchang, Changsha, Daqing, Suzhou and Wuxi), upon approval from the provincial human resources administration and social security administration, the qualified TAOSEs may apply either (i) a flexible work schedule to software design personnel, technology research and development personnel, mid-level and senior management and other personnel who cannot work under a fixed schedule or (ii) a comprehensive calculation work schedule to personnel the nature of whose work requires continuous operation or is suited to a comprehensive calculation work schedule.

Consistent with MHRSS and MOFCOM’s Circular, the Jiangsu Provincial Administration of Labor and Social Security and Beijing Municipal Bureau of Human Resources and Social Security have each promulgated separate sets of local rules for implementing the special work schedule in qualified TAOSEs (the “Jiangsu Rules“ and the “Beijing Rules”). Under the Beijing Rules, an enterprise or branch division registered in Beijing may apply to the district or county level administrator of human resources and social security to implement special work schedules. The applicant is required to ask for opinions on the application of a special work schedule from the trade union, or from the affected employees in the absence of a trade union, and submit the opinions it solicits to the approval authority. In Beijing, the approved period for applications of special work schedules varies from one to three years.

The Jiangsu Rules provide more detailed requirements to TAOSEs wishing to apply special work schedules. The Jiangsu Rules also clarify that with the consent of the dispatching enterprise, the labor-receiving enterprise under a labor deployment arrangement can apply to implement special work schedules. Applicants are required to submit a detailed plan for implementing their special work schedules, which must specify the positions and number of personnel to whom the special work schedule applies, the implementation period, their salaries, their rest and holiday periods, work protections and safety measures, and additional issues related to their employment practices. The applicants are also required to (i) provide notice to their workers of the special work schedule implementation plan for at least five working days; (ii) amend the plan by consulting with the trade union or workers; and (iii) publish and maintain an announcement of the authorities’ approval of the special work schedule’s implementation prominently in the workplace.

In Jiangsu, applications for implementation of a special work schedule must be submitted to the city labor and social security administration, which conducts an onsite inspection after accepting the application and may also seek the opinions of the trade union or workers on the proposed new system. It takes approximately 35 days for administrators to review and examine an application, after which they submit their preliminary review opinions, along with the application materials, to the Jiangsu Provincial Administrator of Labor and Social Security, which may issue its final decision within 10 working days of receiving the opinions and materials and publish that decision on its website. The Jiangsu Rules require that the approved period for application of special work schedules generally not exceed one year.

To apply for special work schedules, TAOSEs are required to be certified jointly by the departments of science and technology, finance, taxation, development and reform, from the city to the provincial level, based on criteria jointly set up by the Ministry of Finance, the State Administration of Taxation, MOFCOM and the National Development and Reform Commission. In addition to application of special work schedules, such certified TAOSEs may also be granted a preferential 15% taxation rate on the enterprise income tax.