On July 6, 2012, the Standing Committee of the National People’s Congress published draft amendments to the PRC Labor Contract Law focusing on the labor dispatch-related provisions of the Labor Contract Law. The amendments are designed to address the continued and substantial use by many companies of dispatched workers who should, but in practice often do not, receive the same treatment as regular employees. According to the draft amendments, the registered capital for a labor dispatch company will be increased from RMB 500,000 to RMB 1 million Yuan and the company must have in place a labor dispatch management system conforming to laws and regulations as well as complying with other conditions as prescribed by laws and administrative regulations. Labor dispatch companies must warrant that the dispatched workers will enjoy the equal pay for equal work as the workers of a receiving unit in both the labor contract and the labor dispatching agreement. The draft amendments also increase fines to be imposed on labor dispatch companies that violate laws and regulations.
The draft amendment emphasize that workers can only be dispatched to temporary (no more than six months), auxiliary or substitute positions. The amendments do not address whether there will be a transition period or clarify in detail what positions should be included in the categories of “auxiliary” or “substitute”. Nor do the draft amendments indicate how they are intended to work for employees who by law must be engaged through a dispatch relationship, such as employees of representative offices of foreign companies in China.