Labor contract law needs to be amended

The Labor Contract Law should be amended to better regulate labor outsourcing, a practice that is overused and leads to inequality in the workplace, legislators said.

Under the law, which came into effect in 2008, employment agencies can be established to provide companies with workers for temporary, subsidiary and substitute positions.

These workers should receive the same pay as employees doing the same jobs for the same employers, it says.

Outsourced workers do not sign labor contracts with the companies they work for but with employment agencies. The agency pays the workers' wages while they charge employers commission and management fees.

"It's very common that outsourced workers do not receive the same pay or enjoy the same benefits as employees in the same posts in the companies. Labor outsourcing has been greatly overused in China," said Wang Ronghua, a deputy to the National People's Congress.

A report released last year by the All-China Federation of Trade Unions, the nation's top trade union organization, said there were more than 60 million outsourced workers in the country, accounting for almost 20 percent of the total urban workforce.

In other countries, labor outsourcing usually accounts for 2 to 3 percent of the total urban workforce, Wang Zhenlin, a senior official with the Ministry of Human Resources and Social Security, was quoted as saying by the Economic Observer.

State-owned enterprises and government-affiliated public institutions and industries such as petrochemicals, telecommunications, finance and banking were the major employers of outsourced workers, according to the trade union report.

Zhou Yue (not her real name) works for a construction design firm affiliated to a State-owned company in Beijing.

"I have been working for the company for three years but my salary is much less than regular employees and the employer does not pay into the housing fund for me. I sometime even have a heavier workload than many regular employees do. It's not fair," she said.

In China, employers and employees collectively pay into a housing fund that helps cover housing costs.

"It's easy for employment agencies to reach an agreement with employers about outsourced laborers' wages and social security benefits. As far as I know, many agencies just pay into workers' social security accounts a sum equal to 60 percent of urban residents' average wages," said Wang Ronghua, the NPC deputy. Some employers even dismiss workers and then reemploy them via agencies to lower costs, he said.

The more a worker pays into the social security account, the more benefits they can receive during work and retirement.

Jiang Jian, another NPC deputy, said: "The law should clearly state that workers in same positions, with the same titles, doing the same work, and achieving the same results as regular employees, ought to enjoy the same wages and benefits," she said.

Agencies and employers that violate the clause should be ordered by the labor authorities to make up the gap and also pay compensation, she added.