Measures for the Rating of Enterprises' Labor Security Compliance Credit (the ‘Measures’) will come into force on January 1, 2017

In the recent 8 years, a series of laws, regulations entered into force, such as the ‘Law of Labor Contract’, the ‘Social Insurance Law’ and the ‘Interim Provisions of Labor Dispatch’, in addition with the abolishment of the ‘Regulations on Reward and Penalty for Employees of Enterprises’, the employment situation has a huge change. In order to reduce the legal risks, how to manage the employees legally and reasonably, has become an important task to the employer. The Ministry of Human Resources and Social Security has recently released the ‘Measures’. The content of the ‘Measures’ and the trend of the government deserves the attention. The ‘Measures’ mainly includes:

To set an annual verification rating system

Article 4 has stipulated that the labor security supervision organs of the local Human Resources and Social Security departments at the county level or at any level above shall be in charge of the annual verification rating work.

Article 6 has stipulated that the verification rating system includes 9 aspects. E.g. the employer’s formulation of rules and regulations and the implementation thereof; the formation and dissolution of labor contracts; the compliance with relevant regulations on dispatch; the compliance with relevant regulations on the working hour, rest, holidays and etc..

The Labor Security Compliance Credit shall be categorized into three levels: A-B-C

Article 7 has stipulated that those enterprises with Level A have the best credit level, which says the enterprises obedient of labor security laws, regulations or rules have not been investigated or punished by supervision organs. Level C means that the enterprises have 1 of the 6 situations prescribed in the ‘Measures’, such as, the enterprise has been punished by the labor security supervision organ three times or above; the enterprise’s action causes a group event, an extreme event or a severe adverse social influence; or the enterprise has been punished for violating the Criminal Law for labor security illegal activities, and etc.. Despite the Level A and Level C enterprises, the rest enterprises shall be rated as Level B.

To supervise the enterprises with different level with different methods

Article 10 has stipulated that the labor security supervision organs may reduce the daily inspection to the Level A enterprises, increase the daily inspection to the Level B enterprises, and strengthen the daily inspection to the Level C enterprises.