Amendments to the PRC Labor Contract Law take effect on
July 1, adding limitations on employment structures.
On July 1, 2013, amendments to the People's Republic of
China (PRC) Labor Contract Law will take effect. The amendments
increase the regulation of staffing and labor service businesses
and discourage the use of secondment arrangements to avoid
employer-related liabilities. The new law was published on December
28, 2012 and is an important development in China's business
community.
In recent years, increasing numbers of labor-intensive
businesses, including state-owned banks and large multinationals,
have used secondment services provided by staffing firms due to the
difficulties involved in terminating employees and increased
compliance costs in China. The secondment arrangements became
attractive options among employers because the termination of such
an arrangement was not subject to the numerous restrictions set
forth in the labor law and regulations and
