New Labor Law Shenanigans

On Wednesday, the Ministry of Labor and Social Security made public a regulation on employment services and management that is to take effect next year.

A day later, an official with the State Council's Legislative Affairs Office warned companies and enterprises against attempting to evade the new law on promoting employment, which is also to be implemented next year.

The warning came in the wake of the so called "resignation-gate" controversy, in which a Shenzhen-based company reportedly ordered some 7,000 employees to resign and then re-apply for their jobs in an apparent attempt to elude unfavorable stipulations in the new employment promotion law.

Note the Shenzhen-based company is not western or the headline would have read a bit differently.

The reason the company did this is to avoid a new requirement that all terminated employees must be paid one month's salary for every year they have worked for the company. This Shenzhen company was trying to restart the clock prior to the implementation of the law in January. I think we can expect a lot of this in the next few months.