China's top legislature on Friday adopted an amendment to the Labor Contract Law to ensure that workers hired through labor contracting agents receive the same treatment as direct recruits.
The amendment, set to take effect on July 1, 2013, was adopted at the conclusion of a five-day bimonthly session of the National People's Congress Standing Committee after its second reading.
"Hiring via labor contracting agents should be arranged only for temporary, supplementary or back-up jobs," according to the amendment.
"Temporary jobs" refer to positions lasting no longer than six months, while "back-up jobs" are those that can be taken over while permanent workers are on leave for study or other purposes.
The amendment also stipulates that employers should mostly hire workers directly, not via labor contractors, and they should also strictly control the number of "leased workers."
According to the amendment, labor contracting agencies should obtain administrative approval before starting operations and the minimum registered capital requirement has been raised to 2 million yuan (320,800 U.S. dollars), in a bid to protect workers' rights by ensuring effective supervision and the solvency of such agencies.
The Labor Contract Law was adopted in 2007 to protect employees. It went into effect in 2008.
However, serious problems have emerged, as many employers have tended to pay long-term employees hired through contracting agents much less than direct recruits because they are categorized as "leased employees."
According to statistics provided by the Ministry of Human Resources and Social Security, China had 37 million labor contractors in 2011.
The draft amendment was submitted to the legislature for deliberation for the first time in June.