China
Summary
China strictly regulates contingent workforce with a 10% headcount limit for temporary staff and restrictions on eligible positions, requiring careful compliance management.
Key Considerations
- •10% headcount limit for dispatched workers strictly enforced
- •Dispatched workers limited to temporary, auxiliary, or substitute positions
- •Must use licensed staffing agencies with proper permits
- •Equal pay requirements for dispatched vs direct employees
- •Increased enforcement and penalties for non-compliance
Monitoring Strategy
Information not available
What are the limits on labour dispatch in China?
Dispatch is capped and position-restricted. Dispatched workers may not exceed 10% of an employer's total workforce, and dispatch may only be used for temporary (under six months), auxiliary, or substitute positions. These limits, from the Labor Contract Law and the 2014 Interim Provisions on Labor Dispatch, push structural contingent use toward outsourcing models.
Do dispatch agencies need a licence in China?
Yes. Labour dispatch is a licensed business requiring administrative approval and minimum registered capital of RMB 2 million. Using an unlicensed dispatch provider exposes the host to joint liability, so licence verification belongs in vendor onboarding for any China program.
What is the difference between dispatch and outsourcing in China?
Who directs the workers. In genuine outsourcing the vendor manages its own staff and delivers an outcome; in dispatch the host directs the workers day to day. If an arrangement labelled outsourcing operates with host control, authorities can recharacterise it as disguised dispatch and apply the dispatch caps, equal pay rules, and penalties.
Do fixed-term contracts convert to open-ended contracts in China?
Yes. After two consecutive fixed-term contracts, an employee can generally require the next contract to be open-ended, and ten years of continuous service also triggers the right. This makes renewal sequencing a core planning issue for long-running contingent engagements through employing entities in China.
Are dispatched workers entitled to equal pay in China?
Yes. The Labor Contract Law requires equal pay for equal work between dispatched workers and the host's directly hired employees in comparable positions. Social insurance and housing fund contributions are also mandatory for dispatched employees, paid through the dispatch agency.