New Labor Law: Are You Ready?(1)

Lu is an accountant with a foreign firm in Beijing. Of late, the scope of her work has extended beyond pouring over numbers and deciphering financial records. On top of her usual tasks, she has to attend legal courses.

In meeting rooms in star-rated hotels across major cities in China, participants like Lu – top management at their companies – sip coffee and tea as legal experts click through Powerpoint presentations and break down the new Labor Law for them. Their goal: prepare for the tectonic changes that will occur when it comes into effect on January 1st, bringing with it new clarifications and obligations regarding the relationships between employers and employees.

Since its passage, employers have scrambled to gather tips and strategies to face the changes, which will impact recruitment and layoff policies, compensation, payrolls, and provisions in employment contracts.

It also says that employers can no longer unilaterally amend employment policies, but rather, they need to obtain consent from a majority of their employees or the labor union prior to changing policies that directly impact the interests of workers.

This has led to a rush for companies to adjust employment policies and draft standard contracts before the implementation deadline to ensure that they would not be put at a disadvantage.

Capitalizing on Concerns

The legal community has quickly come to the employers' aid by churning out a wide range of courses related to the law. Now, a search on the internet for courses available returns tens of thousands of results, mostly in cities like Beijing, Shanghai, Guangzhou, and Shenzhen.

The courses cost between a few hundred to a few thousand yuan per head. Most courses focus on strategies to avert risk on the part of the employers.

"There is less academic debate about the Contract Labor Law now as we have entered the practical stage. Firms are more interested in knowing how to apply the law," says lawyer Duan Wei, who had been invited by various chambers of commerce and companies to give talks on the law.