FAQ pertaining to secondments
Q: What should be taken into consideration by the employer when he uses seconded employees?
A: The employer must judge whether this work position is temporary, auxiliary or substituting. According to the Amended PRC Labor Contract Law taking effect on 1 July 2013, the employer can only use seconded employees for work positions which are temporary, auxiliary or substituting in nature.
Q: How to identify the nature of secondments?
A: Amended PRC Labor Contract Law further clarifies that “temporary” work position refers to a position which lasts no longer than six months; “auxiliary” work position refers to a position which offers support to primary business positions of an employer; and “substituting” work position refers to a position which is temporarily vacant because of an employee’s full-time study and taking leave.
Q: What are the requirements for a qualified labor dispatch agency?
A: The labor agency shall have registered capital not less than RMB two million; have fixed office premises and facilities suitable for carrying out its business; have management rules on seconding employee in compliance with the relevant laws and regulations. And the labor agency shall be subject to administrative permission for its secondments business. All existing labor agencies will not be allowed to engage in employee seconding services if they fail to obtain the administrative permission and re-register within one year upon the execution of Amended PRC Labor Contract Law.
Q: What kind of punishment would impose if the labor agency and the employer violate the relevant rules regarding secondments?
A: The labor agency and the employer in violation of these provisions regarding secondments shall be ordered to make corrections within a prescribed time limit by the labor administrative authority; and shall be fined up from RMB 5,000 to RMB 10,000 for each seconded employee and revoke seconding services business license if they fail to do so. The labor agency and the employer shall bear joint and several liabilities if the employer causes damage to the seconded employee.
Q: Is there any limitation on the percentage of seconded employee?
A: As though there is no specific percentage in the Amended PRC Labor Contract Law, the employer shall strictly control the number of seconded employee which shall not exceed certain percentage of the total employees. Taking Guangdong for example, the percentage of seconded employee shall not exceed 30 percent of the total number of employees. However, the limitation on the percentage of seconded employees does not apply to the foreign representative offices in China.