New amendments to China’s Employment Contract Law (ECL) severely limiting the use of dispatched workers by employers in China took effect last month. The amendments potentially affect thousands of employers and tens of millions of workers. If a company is using dispatched workers, this is an issue that needs its attention. But what is required, what issues need to be considered and what is happening on the ground?
“Dispatched workers” are employed by authorized labor dispatch agencies and sent to out to work for employers on a contract basis. There is no employment relationship between the companies and the dispatched workers. There are various reasons companies use dispatched workers, chief among them being to reduce labor costs or get around headcount restrictions.