Labor dispatch is generally regulated by Section 2 of the PRC Labor Contract Law. However, it also leaves dispatched workers more vulnerable to exploitation.
This is advantageous for companies using labor dispatch, as the risk of a labor dispute is transferred to the agency that provides them with workers. Dispatched laborers are technically employed by their agencies rather than the companies they do work for, so any workplace grievances must be dealt with by the dispatch agency. This is especially beneficial for businesses in seasonal industries or with project-based work, where the amount of labor needed is not consistent year-round.īesides, labor dispatch is also attractive for employers because they face fewer risks in the event of a labor dispute. Dispatch agencies offer companies temporary workers for particular projects or a certain period of time. Additionally, a representative office (RO) cannot hire staff directly, and their employees must be seconded from dispatch agencies.ĭue to its flexibility and lower cost, labor dispatch has traditionally been one of the most popular ways hire employees in China.
DISPATCH MEANING LICENSE
While the preparatory work for setting up entities in China may require the assistance of Chinese staff, it is necessary for foreign investors to obtain their local entity’s business license before formally hiring employees. Labor dispatch is an alternative option for foreign-invested enterprises (FIEs) looking to hire Chinese staff.
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