January 1, 2008, New Labor Law took effect. As employer understanding labor law is of great importance for making decisions and avoiding risks. As employee, it is very helpful to know the content of labor law in order to protect his own interest.

The following are the difference between the old labor law and new labor law.

• A. Employer will incur severe punishment if it does not sign labor contract with its employees.
• B. Long-term labor contract or no-fixed-term labor contract are encouraged to be made between employer and employees.
• C. The total cost of terminating labor contract is increased in terms of economic compensation.
• D. Labor dispatching is standardized and limited.

There are 10 highlights in the new Labor Law.

1. Employees of private non-enterprise organization are protected. New Labor Law has included private non-enterprise organizations and their employees.
2. Employer that does not follow the law to sign contract must pay double compensation.
3. Employee has right to ask the employer to continue a no-fixed-term labor contract.
4. For the 1 year labor contract, its probationary period can not exceed 2 months.
5. “Compensation for breach of contract” has the upper limit.
6. If the employer does not pay social insurance for the employee, the employee has the right to terminate the labor contract at any time.
7. Employees of labor dispatching should have the labor contract of 2 year (at least). Dispatching employer and hiring employer should bear the liability together if the employees’ rights are damaged during the contract.
8. Non-full-time employees can not be paid monthly. They should be paid at longest every 15 days.
9. Employer cannot ask for deposit from its employees. If so, employer can assume penalty of ￥2000 at most.
10. If the employer owed salaries in arrears maliciously, it would be forced to pay additional equal compensation. The amount of compensation should be between 50% and 100% of amount payable.

For further information please contact Ken Lee klee@lla.cc at Lee & Lee Associates www.lla.cc

Article Date: 1st January 2008

Author: Ken Lee

Firm: Lee & Lee Associates