배움과 공유의 시간

Characteristics of the Labor Law System

With more than 30 local governments on the basis of the socialist system, China operates a labor legal system that is quite different from ours. It has a complicated system that is difficult to understand easily for Korean companies, such as the presence of the central and local laws, written labor contractism and the importance of employment rules. Therefore, it is very dangerous to enter China and manage labor on the premise that it will be similar to Korea. The common sense of Korean labor management is not common in China.

1. The legal system

In China, which has a population and national territory equal to dozens of countries, it is practically difficult to apply the central basic law uniformly across the country because of differences in economic and social development between provinces, the gap in living standards, culture and mindset. Also, after the reform and opening up, the Chinese government has decided to promote economic development.
Under the premise of the "centralization system," the local decentralization, or the local prestige policy of central power, is being implemented.

A case in point of decentralization is the local prestige of the legislative power. The "legislative law" that went into effect in July 2000 allows local governments above a certain level (e.g., provinces, municipalities, and coastal cities) to enact local regulations within the scope of the central law.
The central laws have their respective roles: principle-based (abstract and principled), and local laws (concrete and practical). In addition, the Supreme People's Court frequently promulgates "judicial interpretations" of legal matters related to judicial proceedings, which have a judicial effect and thus are binding on the litigants, as is the law.

Importance of Local Laws

Chinese labor laws are complex and difficult compared to Korea. It is composed of multiple layers of central and local laws, judicial interpretation and administrative regulations, and there are only independent local labor laws in different provinces, even different local law enforcement agencies differ in their application standards.

The minimum wage and social insurance payment rates vary from region to province, and the payment and conditions of high-temperature allowances and heating costs are set differently depending on which climate zone is located. The same labor dispute issues are often subject to different sentencing standards if the region is wrong.
For this reason, China, unlike our country, puts "local law" before "central law" in the actual labor scene. The central law defines only large legal boundaries in principle, and the tax rules for implementation are established and operated independently by each local government. For this reason, the local labor and judicial authorities are also making administrative or judicial decisions by prioritizing local laws. .

Since most of the Chinese labor-related data we encounter frequently centers on the basic laws and administrative laws of the central government, it is not helpful to the labor management of companies operating in certain provinces. Therefore, on-site labor management, it is necessary to check and verify the important local regulations in the areas in which it is advancing, as well as the central laws. Labor management without grasping local laws and administrative notices may face labor disputes or be in a situation where labor costs are overpaid.

administrative notice of local government
Companies entering China must have a clear grasp of the various administrative notices promulgated by the local local government. This is because laws and administrative notices related to labor and social security systems continue to change in content or are updated regularly each year.
For example, for "the average monthly wage of a former worker" which is the basis for the payment of social insurance premiums, the figures are regularly issued by local governments in the form of "notifications" each year. Failure to do so may result in errors in labor-related work, including social insurance payments and calculation of economic compensation. It should also be noted that the payment rates of social insurance, the minimum wage standard and the number of days of legal paid leave are also subject to different local standards, and that the content continues to fluctuate on a regular and irregular basis.