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From January 1, 2017, all employers in China will be subject to a new set of measures designed to evaluate their compliance with the laws, regulations and rules concerning labor security. Originally issued in July 2016 by the PRC Ministry of Human Resources and Social Security, the “Measures for Evaluating Compliance and Integrity of Employers’ Labor Protection”, are designed to put into place a system which efficiently enforces labor security and motivates businesses to abide by labor laws.
The new measures will be enforced by the Labor Security Supervision Agency and implemented by the local department of the Ministry of Human Resources and Social Security. Businesses will be assessed through various methods, including daily patrol inspections, desk reviews, complaint reporting, special examinations and with reference to the company’s previous rating.
Companies that have been assessed will be graded as either A, B, or C-class, depending upon how they perform against a number of criteria. These are:
  1. Establishment of internal labor by-laws;
  2.  Existence of signed contracts with employees;
  3.  Evidence of compliance with relevant regulations concerning labor dispatch;
  4.  Evidence of compliance with regulations forbidding the use of child labor;
  5.  Evidence of compliance with regulations on special labor protection for women and young labor;
  6.  Compliance with the regulations on employees’ working hours, rest and leave;
  7.  Units' payment of labor remuneration as specified in the labor contract and in compliance with minimum wage rates;
  8.  Employers' participation in social insurance and payment for social insurance premiums
The regulation also states that other topics may be covered during the assessment but does not specify any details.
Once a company has been assessed it will be graded depending upon its adherence to above criteria:
  1. A-class denotes the enterprise abides by the laws, regulations and rules on labor and social security with no illegal activities;
  2. B-class denotes the enterprise fell below the required standard but not under the rules for C-class;
  3. C-class denotes the enterprise has been:
  • Punished three or more than three times due to labor security violations;
  • The enterprise has caused a massive event or extreme events that have a serious impact on society;
  •  Punished for using child labor and/or forced labor;
  • Refused to implement the rectification instructions within a set period of time, administrative decision and administrative punishment decision from the labor security supervision;
  •  Resists or obstructs the authorities;
  •  Prosecuted for criminal liabilities because of labor security violations.
The grade awarded will affect the frequency upon which the company is evaluated and receives daily inspections. For example, an A-class enterprise will see a decrease in the daily checks, while a B-class will see an appropriate increase. C-class enterprises will be given targets and be placed under supervision with increased inspections. In addition, the Human Resources and Social Security department will interview the persons in charge, in order to make them comply with the relevant laws.
Evaluations will be kept for three years and information will be shared with the industrial and commercial departments, financial sectors, the Housing and Urban-Rural Development Department, the tax department and labor unions, in order to coerce businesses into correct practice. Incentives and penalties will also be offered, depending on results.

For Enquiries
Ms Alexis Shu
T +86(0) 755 2532 8137
About SGS
SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 90,000 employees, SGS operates a network of over 2,000 offices and laboratories around the world.