The amended law, which takes effect on July 1, 2013, is effectively closing a loophole which affected the conditions of about a third of the workforce at Chinese and multinational factories in China.
“Hiring via labour contracting agents should be arranged only for temporary, supplementary and backup jobs,” the amendment reads, according to the Xinhua news agency.
Although in theory contracted workers are paid the same, with benefits supplied by the agencies who are legally their direct employers, in practice many contracted workers, especially in manufacturing industries and state-owned enterprises, do not enjoy benefits and are paid less.
Employment agencies have been set up by local governments and even by companies themselves to keep an arms-length relationship with workers. Workers who are underpaid, fired or suffer injury often find it very difficult to pursue compensation through agencies, according to a Reuters report.
Korean electronics giant Samsung Electronics said in November that it would require its 249 supplier factories in China to cap the number of temporary or contracted workers at 30% of regular full-time employees.
It announced the corrective measure after Chinese labour activists reported violations of overtime rules and working conditions as well as under-age workers at Samsung suppliers. Samsung says its own audit did not find workers under China’s legal working age of 16.
