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Amendment to Labour Contract Law of People’s Republic of China

On December 28th, 2012, the 30th Session of China’s Standing Committee of the Eleventh National People’s Congress adopted The Decision of the Standing Committee of the National People’s Congress on Amending the Labour Contract Law of People’s Republic of China (the “Decision”)to amend the current regulations on labour dispatch. The Decision has come into force on 1st July, 2013. The amendments are mainly focused on the qualifications of the company engaging in labour dispatch business and the conditions of labour dispatch.


On June 20th, 2013, the Ministry of Human Resources and Social Security of People’s Republic of China promulgated the Implementing Measures for Administrative Licensing for Labour Dispatch (the “Implementing Measures”) which also has come into force on 1st July, 2013. The Implementing Measures further provided that, before engaging in labour dispatch business, an administrative license shall be applied for with the administration of human resources and social security, and no entity or individual is allowed to carry on labour dispatch business without a license.


1.       What are the qualifications required by the Decision?

(a)    The registered capital shall not be less than RMB two million;

(b)   Have fixed premises and facilities adapted to the business development;

(c)    A labour dispatch management system in conformity with laws and administrative regulations has been established ;and

(d)   Other conditions stipulated by laws and administrative regulations.


2.      What are the procedures for Obtaining a Labour Dispatch Operation License?

I Application Materials

As provided in the Implementing Measures, to apply for a Labour Dispatch Operation License, an applicant shall submit the following materials:

(a)    The written application;

(b)   The Business License or the Name Reservation Approval;

(c)    The Articles of Association and the Capital Verification Report or Financial Audit Report;

(d)   The authorization documents of the business premises and list of office facilities and equipments, information management system and other documents which are adapted to the business development;

(e)    The identity certificate of the Legal Representative;

(f)     The labour dispatch management system including rules and regulations related to the dispatched employees’ interests such as employment contract, salary, social security, working hours, leave and vocation and disciplines and so on, and the samples of the labor dispatch agreements.

II Application Procedure

(a)    The competent authority shall examine the application documents, and make a decision regarding whether or not to approve the administrative licensing within 20 working days from the date of accepting the application materials. If the application is approved, the competent authority shall inform the applicant to receive the Operation License within five working days. If the application is not approved, the competent authority shall inform the applicant of the specific reason and the right to appeal.

(b)   If the name, address, legal representative, registered capital or other relevant issues of a labor entity have changed, and such changes meet the lawful conditions, the competent authority shall carry on the procedure of modification according to laws within ten working days from the date of acceptance of application.

(c)    The validity period of the Operation License is three years, the labour dispatch entity shall submit a written application for extension of the Operation License at least 60 days before expiration.


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