Recently, the government of China issued draft regulations relating to provisions of Labour Dispatch. Labour dispatch arrangements are supplementary arrangements for provision of labour and can only apply in respect of temporary positions of six months or less; temporary replacement of a permanent employee; or ancillary positions.
The proposed regulations limit the number of dispatched employees in “auxiliary” positions to 10 per cent of the total workforce. Nevertheless, this rule is not applicable to the Chinese representative offices of foreign companies.
The draft regulations are yet to be finalized. Once the regulations come into force they would affect foreign investors with large workforces in China as they would impact the use and definition of independent contractors.
