Recruiting in China

China's new immigration law, which will take effect on July 1, 2013, will impose stiffer penalties on those found to have violated it, the Philippine Consulate General in Guangzhou warned on Thursday.

In a statement sent by the Department of Foreign Affairs, the Consulate said the new immigration law provides particular attention to the so-called "three illegals" - illegal entry, residence and employment. Each violation is penalized with different and more severe penalty.

"Foreigners found illegally working in China may be subjected to a fine raning from RMB (renmibi) 5,000 to RMB20,000. Possible detention of five to 15 days may also be imposed for serious violations. Income acquired from illegal employment will also be confiscated. Illegal residents will be fined from RMB500 per day up to a maximum amount of RMB10,000, or imprisonment of five to 15 days," the statement said.

Under the new law, employers who hire foreigners without the proper permits and documentations will also be penalized.

The new law also provides fine and penalty of imprisonment to persons or organizations aiding foreigners in committing any activities defined under the so-called "three illegals."

The Consulate urged Filipino nationals affected by the changes in the immigration law to contact the Consulate for advice. The public is also warned about agents misrepresenting themselves as processors of exit visas for overstaying foreigners.

Changes to Chinese employment law will limit the use of agency workers by companies, as well as guaranteeing those workers the same rights as those hired directly.08 Jan 2013

An amendment to the Labor Contract Law (Chinese) will limit the use of 'labor contracting agents' by companies to "temporary, supplementary or back-up jobs". The change, which has been adopted by the National People's Congress Standing Committee, is due to take effect on 1 July 2013 according to national press agency Xinhua.

The Labor Contract Law is one of China's main sources of employment legislation. It came into force in 2008 and is administered by the Ministry of Human Resources and Social Security. Among other provisions, the law requires employers to pay employees' health insurance and social security contributions, and includes protection for employees on probation and working overtime.

According to Xinhua, the amendment was proposed in June to prevent employers hiring long-term workers through agencies. According to Ministry figures, China had 37 million agency workers in 2011.In practice, companies can pay these workers much less than those recruited directly as they are categorised as 'dispatched employees'.

The amendment reiterates a right for agency workers, or "dispatched workers", to receive "equal pay for the same work" carried out by a company's "formal employees". Employers must "adopt the same remuneration distribution measures of its formal employees at the same position for such dispatched worker".

Employers will also be required to hire the majority of their workforce directly, rather than via contractors, and to strictly control the number of 'leased workers' they hire. The amendment also clarifies those roles that can be filled by agency workers. 'Temporary' jobs are those lasting no longer than six months, while 'back-up' jobs are those that can be taken over while permanent workers are on maternity, study or holiday leave.

The amendment also creates new administrative rules for labor contracting agencies. The minimum amount of registered capital that an agency must hold has been increased to 2 million yuan, while agencies will also be required to obtain administrative approval before they can begin arranging employment contracts.

At a press conference to introduce the changes Kan He, vice chair of the committee's legislative affairs commission, told Reuters that the changes were intended to "prevent abuse".

"The regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim," he said. "The majority of workers at a company should be under regular labor contracts."

China amended its labor law Dec 28 to ensure that workers hired through contracting agents are offered the same conditions as full employees, a move meant to tighten a loophole used by many employers to maintain flexible staffing.

Contracting agencies have taken off since China implemented the Labor Contract Law in 2008, which stipulates employers must pay workers’ health insurance and social security benefits and also makes firing them very difficult.

WORKFORCE

“Hiring via labor contracting agents should be arranged only for temporary, supplementary and backup jobs,” the amendment reads, according to Xinhua news agency. It takes effect on July 1.

Contracted laborers now make up about a third of the workforce at many Chinese and multinational factories and in some cases account for well over half

EMPLOYMENT AGENCIES

Some foreign representative offices, all news bureaus and most embassies are required to hire Chinese staff through employment agencies, rather than directly.

In theory contracted workers should be paid the same, with benefits supplied by the agencies who are legally their direct employers.

However, in reality many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.

Employment agencies have been set up by local governments, and even by companies themselves, to keep an arms-length relationship with workers.

Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through the agencies.

SAMSUNG SUPPLIERS

Korean electronics giant Samsung Electronics said last month that it would require its 249 supplier factories in China to cap the number of temporary or contracted workers at 30 percent of regular full-time employees.

It announced the corrective measure after Chinese labor activists reported violations of overtime rules and working conditions as well as under-age workers at Samsung suppliers.

Samsung says its own audit did not find workers under China’s legal working age of 16 and therefore it had not violated any of China’s employment regulations..

Fresh data shows how China’s income gap is worsening, an issue new leader Xi Jinping has resolved to tackle.

While decades of strong economic growth have lifted hundreds of millions of Chinese off the poverty line, the country’s wealth gap has widened to the point where it is among the world’s most unequal nations.

China’s Gini coefficient, which is commonly used to gauge inequality in income or wealth, stood at 61 in 2010, according to a study by the Survey and Research Centre for China Household Finance.

The Gini coefficient measures the wealth gap on a scale of 0 to 100. A reading above 40 usually marks strong inequality in wealth and income.

The coefficient of all countries monitored by the World Bank averaged 44 for 2010. Ireland’s Gini coefficient in 2010 was 33.2, according to Eurostat, a sharply worse reading than in 2009, when it was 28.8.

The Gini data is extremely sensitive in China, and the government has not released an official figure since 2000, when it stood at 41.2.

‘ Rare ’

Gan Li, chief researcher and a professor at the research centre, which is part of the Southwestern University of Finance and Economics in Chengdu, said the reading was “rare in the world” and the gap was wide in both urban and rural areas.

But he said the reading was not “dreadful” because a wide gap between rich and poor was common in a fast-developing country.

One option would be to raise the minimum wage, but that would also hurt employment, he said. “We hope the government could spend more on improving people’s social welfare,” said Mr Gan.

Research earlier this year from the think tank showed that 10 per cent of Chinese households held up to 57 per cent of all disposable income.

The domestic east-west divide was stark, too. The combined income of all households in eastern provinces was about 2.7 times that of the west and central regions.

The Central Economic Working Conference (CEWC) proposes the government enhance people’s livelihood and improve the standard of living. The goal is to be addressed under the guidelines of “keeping the bottom line, highlighting the key points, improving the mechanism and positively guiding the public opinion”.

The CEWC highlighted guaranteeing the basic life of low-income people. The government pledges to finance students born in poor families. Attention will be paid to stabilizing and expanding employment. The government will also strive to create more job opportunities for college students.

The government plans to shore up the development of small businesses and push large enterprises to recommit to corporate social responsibilities. The social insurance systems in both rural and urban areas will be enhanced. China will continue to intensify the construction and management of affordable housing and accelerate the transformation of shantytowns.

The Chinese government vows to lead people to setting in mind that to improve the living standard or become well-off is through hard work.

“To guarantee people’s livelihood requires the government to not only make every effort, but also have a clear evaluation of its own capability. To ‘keep the bottom line and highlight key points’ is very important,” commented Zhang Li Qun, researcher of macro-economic department in Development Research Center of the State Council.

Zhang said that one of the key points of the government’s work is to provide basic public services, and the bottom line is to guarantee the basic livelihood of people. The low-income group is problematic in society, and they especially need the help from the government. Furthermore, with the slowdown of economic growth and the promotion of economic restructuring, some people’s employment and income is expected to be affected. Therefore, the corresponding guarantees should be prepared earlier.

Zhang came up with one conclusion: that to improve people’s livelihood, on one hand the government should expand economic input, and on the other hand people should create wealth through hard work. Neither of the two should be neglected.

A raft of favorable measures, including expanding recruitment programs, are leading to more foreign experts and expertise, a senior official said at a forum on Monday.

State-owned enterprises directly under the central government have hired more than 1,600 overseas employees, said Huang Shuhe, deputy director of the State Council's State-owned Assets Supervision and Administration Commission.

"International experts have helped these enterprises produce many of the world's leading technologies and products with their own intellectual property rights, and that has laid a foundation that will carry the enterprises forward," he said.

A number of recruitment programs are in operation.

The Recruitment Program of Global Experts is one and through it a research and development group, involved with 15 State-owned enterprises in Beijing, hired 136 high-level experts.

China started the program in 2008, in a bid to attract 2,000 overseas professionals to key projects across a range of sectors from engineering to finance.

Another recruitment program, which started last year, aims to introduce up to 1,000 foreign professionals over 10 years to help spur innovation, promote scientific research and corporate management.

The project has just brought in 94 recruits, according to Zhang Jianguo, director of the State Administration of Foreign Experts Affairs.

Professionals recruited by both programs will be entitled to subsidies, research allowances, favorable salaries, residency permits, medical care and insurance policies.

Professor Robert Gilbert, 66, was one of the new recruits.

Gilbert, an Australian who studies nutrition and food science, started work in China in October. He plans to build his own laboratory at Huazhong University of Science and Technology and Wuhan University.

China's emergence as a major global economy has made many foreign professionals shift their focus from traditional talent absorbers, such as the United States, he said.

"I enjoy being in China. It's very comfortable working and living here and I will probably prolong my stay in China when my contract ends in four years," he said.

Although China has been trying hard to attract international professionals, the country is still at the preliminary stage of attracting global talent, according to Wang Huiyao, director of the Center for China and Globalization in Beijing.

Only about 600,000 foreign professionals have work permits in China, while the US annually grants more than 100,000 green cards for foreign talent and nearly 90,000 talent visas, he said.

"We should do more to get global talent, for example by introducing more favorable and convenient visa and residence policies," he said.

Wu Jiang, director of the Chinese Academy of Personnel Science, said the country should optimize its structure of recruitment.

"For example, China only has 10 percent of its foreign experts working in the economic field. It's too low," he said. "We know what kind of talent we need most only after we get a better understanding of the country's talent and industrial structure."

The government should also provide better public services and make its legal environment for talent introduction better, Wu suggested.