In China, tens of millions of people are working for their employers under indirect contracts, but they may soon benefit from a newly amended labor contract law. Since July, those so-called outsourced workers are now entitled to the same amount of pay as regular staff doing the same job. In theory this will make their lives much better. But on what scale can this amended law help?

There are around 60 million outsourced workers in China. These employees do not hold a permanent contract, but in some cases they make up more than half of a company’s entire staff. Outsourced workers are dispatched through third party recruitment agencies, and they’re deemed as temporary workers for their ultimate employer. More often than not, they end up earning less.

Jia Jia, lawyer of Shanbang Law Office, said, "Hiring outsourced workers has been a very common practice throughout China especially in state-owned enterprises. It’s cheaper for the employer but the employees usually work more, while earning less because they do not have stability."

Since July, amendments to the Employment Contract Law have been effective for the first time. It comes six years after the Law was enacted. Outsourced workers are believed to benefit the most from the current changes, as the law now demands equal pay for equal work. Companies failing to do so may be fined up to 10 thousand yuan per head. So the bill could amount to tens of millions of yuan depending on the size of the company.

Jia said, "The amendments are a good start. But many more details need further discussion. For example how do you define equal work? Employees work nature may be similar but it isn’t always exactly the same. If an employee goes to court what kind of proof that will be accepted to prove equal work is not so clear."

Another change is that outsourced workers are now not allowed to hold contracts longer than six months. This move aims to force employers to sign proper contracts with more employees rather than using recruitment agencies. But for large-sized companies, this new rule is difficult to follow.

CCTV reporter Ai Yang said,"While it’s good news that employees will now be better protected by law, there’s also a concern that employers may choose to lay off outsourced workers to shun the added costs. So the amended labor contract law has indeed raised people’s awareness in their legal rights, but its effectiveness still yet has to be tested."

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