On January 26, 2014, the Ministry of Human Resources and Social Security (“MOHRSS”) released “the Interim Provision on Labor Dispatch” which will come into force on March 1^st, 2014.

Key Points of the PROVISION

1. Further restrictions on the use of dispatch workers

Under the Provision, dispatch workers may “only” be used for temporary, auxiliary or substitute positions, as defined below:

A “temporary” position defined as a position in which the person is hired for a consecutive period of no more than six months.

An “auxiliary” position is defined as one in which staff engaging in a company’s non-core business provide services to those involved in the core business.

A ”substitute” position is defined as one in which staff are hired to temporarily replace employees who leave work for a fixed period of time for study, leave or other reasons.

2. Limits on the number of dispatch workers

The dispatch workers in a user company should not exceed 10% of the total workforce of the user company.

3. Prohibition on discrimination against the dispatch workers.

The user company shall provide the dispatch workers with benefits appropriate for their job positions pursuant to the Article 62 of Employment Contract Law.

4. Requirements for thetrans-regional labordispatch provider

If a staffing agency dispatches workers to another region, its branch office based at the place where the user company is located shall pay social insurance premiums for the dispatch worker, in line with the rates and standards of the place where the user company is located, or entrust the user company to do this in case that the staffing agency has no branch office at the place where the user company is located.