SGS : Measures for Evaluating Compliance and Integrity of Employers’ Labour Protection

SAFEGUARDS | Labor Standards NO. 071/17

On July 25, 2016, a set of 'Measures for Evaluating Compliance and Integrity of Employers' Labour Protection' (Hereafter referred to as 'the Measure') was issued by the PRC Ministry of Human Resources and Social Security. These Measures took effect on January 1, 2017 and will apply to all China employers, so as to further enhance the enterprise's classified regulation and put in place the foundations for building a robust labour security credibility system.

'Evaluate Compliance and Integrity of Employers' Labour Protection' is to evaluate compliance and grade their labour security based on the extent of their compliance to the laws, regulations and rules. The measures will be implemented by the labour security supervision agency and implemented by the local Human Resources and Social Security department annually under their jurisdiction. These Measures are implemented based primarily on daily patrol inspection, desk review, complaint reporting, special examination and the enterprise's rating from the previous year.

It states the procedure for establishing an evaluation grade. 'The Measures' clearly stipulates that the Human Resources and Social Security department will inform the evaluation result to the enterprise in an appropriate way- the method for this communication is not specifically defined, and put the result into a rating file, keeping them for at least three years. In addition, the Human Resources and Social security department should build the credit information sharing mechanism together with industrial and commercial department, financial sector, housing and Urban-Rural Development, tax department and labour unions to conduct the united incentives and penalties for enterprises depending on results.

It establishes the basis of evaluation grades. The Human Resources and Social Security will evaluate the compliance and integrity of employers' labour protection based on the following cases:

1. the establishment of internal labour bylaws;
2. existence of signed contracts with employees;
3. evidence of compliance with relevant regulations concerning labour dispatch;
4. evidence of compliance with regulations on forbidden using of child labour;
5. evidence of compliance with regulations on special labour protection for women or young labour;
6. compliance with the regulations on employees' working hours, rest and leave;
7. units' payment of labour remuneration as specified in the labour contract and in compliance with minimum wage rates;
8. the employers' participation in the social insurance and payment for social insurance premiums;
9. the regulation also states that other topics may be covered but does not go into detail.

This comes together to create the grade classification. The grade of enterprise's labour security was divided into A-class, B-class and C-class. Specific criteria as follows:

1. The enterprise shall abide by the laws, regulations and rules on labour and social security, it will be rated A-class if there are no illegal activities related to labour security;
2. The enterprise was punished but not under C-class due to the illegal activities, it rated B-class;
3. In any one of following situations, the enterprise will be rated C-class.

a) it was punished more than three times (including three) due to the labour security violations;
b) the enterprise has caused a massive event or extreme events, and have a serious impact on the society;
c) it was punished for using child labour and forced labour;
d) refusal to implement the rectification instruction within a period, administrative decision and administrative punishment decision from the labour security supervision;
e) resists or obstructs the labour security supervision of human resources and social security wrongfully;
f) It is prosecuted for the criminal liabilities because of the labour security violation.

The Measures stipulate disciplinary measures. 'The measures' cover classification regulations for all enterprises within the scope of labour security supervision based on the evaluation result, this will result in an increase or decrease of the daily check frequency accordingly.

1. A-class enterprise, properly decrease the daily check frequency of labour security supervision;
2. B-class enterprise, appropriately increase the daily check frequency of labour security supervision;
3. C-class enterprise, will be placed on the key targets of labour security supervision with a strengthened daily inspection. Moreover, the Human Resources and Social Security department will interview the persons in charge, urging them to comply with labour security laws, regulations and rules.

Thus, the formulation of 'Measures for Evaluating Compliance and Integrity of Employers' Labour Protection' contributes to improve pertinence and enforcement efficiency of labour security supervision; urges enterprises to abide conscientiously by the law and regulation of labour security; standardizes the employment management; sets up the law-abiding integrity image and promotes the development of enterprise labour protection legal system.

Data source: China Human Resources and Social Security department (bureau) website

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