(New) labor rules for gig workers & Big Tech in China
For food delivery workers, Uber-like drivers, and the "platforms."
Very briefly, before today’s main dish: The Wall Street Journal opinion has corrected the apparent errors sourced directly from the 84-page addendum on COVID-19 origins tracing from the House Foreign Affairs Committee minority staff, led by ranking Republican Rep. Michael McCaul (Tex.).
That followed my Aug. 17 emails to them and - two days later - a Pekingnology newsletter, though I can’t 100% link them with the correction, as the Journal’s opinion pages could also have heard from others.
So far, a similar correction hasn’t been seen from the Washington Post opinion or the Media Contact of Rep. McCaul, who has also been emailed.
This newsletter features a full translation of the 关于维护新就业形态劳动者劳动保障权益的指导意见 (Mandarin) Guidelines on protecting the rights and interests of workers in new forms of employment and some notes.
The document, published in mid-July by eight central-level bodies led by the Ministry of Human Resources and Social Security, was briefly mentioned in the Aug 17 Pekingnology newsletter presenting some background for Hong Kong-listed food delivery giant Meituan’s slump in valuation in late July.
But this document needs higher visibility because its scope is much wider than just food delivery, covering also online car-hailing drivers, truck drivers, and internet marketing specialists. That means other Chinese tech companies such as Didi, which relies on an army of drivers, are also under its jurisdiction.
If you need an absolute number for reference, Premier Li Keqiang said China counts over 200 million flexible workers and a 2021 report by the State Information Center counted 84 million workers in the “sharing economy” which includes food delivery, car-hailing, office sharing, accommodation, etc.
Also, a deep dive into the government text helps understand - at least part of - the exact details of what’s been widely termed as China’s crackdown or attack at Big Tech: what Beijing expects from them and for their stakeholders - in this case, their workers, especially those at the lower end.
Again, this newsletter is neither official nor authoritative and doesn’t reflect the views of anyone besides your Pekingnologist.
人力资源社会保障部 国家发展改革委 交通运输部 应急部
市场监管总局 国家医保局 最高人民法院 全国总工会
Guidelines on protecting the rights and interests of workers in new forms of employment
Jointly issued by the Ministry of Human Resources and Social Security, the National Development and Reform Commission, the Ministry of Transport, the Ministry of Emergency Management, the State Administration for Market Regulation, the National Healthcare Security Administration, the Supreme People's Court, and the All-China Federation of Trade Unions
In recent years, with the rapid development of the platform economy, a large number of employment opportunities have been created and the number of workers engaged in new forms of employment, such as delivery personnel for online orders, online car-hailing drivers, truck drivers, and internet marketing specialist, has increased massively. But these workers face new situations and problems in protecting their rights and interests. In order to thoroughly implement the Party Central Committee and the State Council’s major policies and plans, support and regulate the development of new forms of employment, protect the rights and interests of workers in new forms of employment, and promote the well-regulated, sound, and sustainable development of platform economy, with the consent of the State Council, we issue the following guidelines:
1、 Regulate the use of labor, define the responsibility to protect their rights and interests
（1）We shall guide and supervise the enterprises to employ workers in accordance with laws and regulations, actively fulfill their responsibilities in employment, and stablize the workforce. Enterprises shall provide care and support for their employees and make efforts to improve the working conditions, expand the career development space, and gradually improve the protection of the rights and interests of their workforce. Enterprises need to foster a healthy and positive enterprise culture and share the fruits of development with their workforce.
（2）Enterprises and workers should sign employment contracts in accordance with laws under the circumstance where a labor relationship can be established. If the enterprises and workers do not fully conform to the circumstance where an employment relationship can be established, but the enterprises exercise management over workers’ labor, we shall guide them to conclude a written agreement to reasonably determine the rights and obligations of each side. For individuals who conduct their own business operations or do freelance work on the platforms, the rights and obligations of both sides fall under civil laws.
(3) If platform enterprises organize workers to complete the platform’s work through cooperative employment such as labor leasing, they should select companies with legal business qualifications and supervise them to protect the rights and interests of the workers. If the platform enterprises employ workers through labor leasing, they should fulfill the responsibilities of the labor dispatch employing unit in accordance with laws. If the rights and interests of workers are damaged in employment outsourcing and other cooperative employment methods, the platform enterprises should assume the relevant responsibilities in accordance with laws.
Note: Many jurisdictions are adapting to the new reality in the times of a gig economy. It happens that a Californian judge just ruled Proposition 22 is unconstitutional. To your Pekingnologist, whether Uber and Lyft drivers in California are employees or independent contractors is similar to the question that the guidelines are grappling with: if Meituan riders and Didi drivers are not their employees per se, how should their rights and interests be protected? Bottom line: Chinese Big Tech cannot say it’s none of their business.
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2、 Further develop the institutions and shore up the weakness in protecting the workers' rights and interests
(4) We shall implement a fair employment system to eliminate discrimination. When recruiting workers, enterprises shall not illegally set discriminatory conditions such as gender, ethnicity, and age, nor should they collect money or assets from workers in the name of guarantee deposit or in other names, or illegally restrict workers' employment on multiple platforms.
You deliver food for one platform, the platform must not forbid you to deliver food for its competitor. Similarly, you should also be able to drive for two or more car-hailing services.
(5) Efforts will be made to improve the minimum wages and payment guarantee system and bring the workers in new forms of employment, who do not fully conform to the circumstance to establish a labor relationship with enterprises, into the coverage of state support. We shall supervise the enterprises to ensure that the workers who have done their job earn no less than the local minimum wage. The wages should be paid on time and in full and the enterprises shall not embezzle them or delay in payment without reason. We shall guide enterprises to establish a reasonable mechanism for pay rise, and gradually improve the wages.
Notes: Even if the delivery workers are not employees per se, they shall still enjoy some protection. The minimum wage applies. They are entitled to *some* pay rise as well.
(6) We shall improve the system to better protect the workers’ right to time off, promote the standardization of labor quotas in the respective industry and scientifically determine the labor intensity and workload of the workers. We shall supervise the enterprises to make reasonable rules on working hours and rest according to regulations, and pay workers remunerations that are reasonably higher than those for normal working hours if the work is arranged on statutory holidays.
Note: Yes it’s a crackdown on overtime and insufficient pay for work on legal holidays.
(7) We shall improve and enforce the accountability system for occupational safety and health, and strictly implement the national standards for the protection of the workers’ safety and health. Enterprises should strengthen their consciousness of workplace safety and not develop indicators for performance appraisal that will undermine the safety and health of the workers. Relevant laws and regulations concerning safety in production shall be strictly abided by, with all the staff shouldering the responsibility of production safety. Safety regulations and operation rules need to be formulated and improved. Workers need to be equipped with necessary work protection gears and facilities of occupational safety and health, and their tools should be timely inspected. Enterprises shall strengthen the education and training on workplace safety and occupational health, and pay attention to the physical and mental health of the workers, providing them with psychological guidance in time. Occupational protection under special circumstances, such as bad weather, should be strengthened in order to minimize workplace accidents and occupational disease hazards.
(8) We shall improve the policies related to basic endowment/pension insurance and medical insurance. All regions shall relax hukou/household registration-based restrictions to allow workers in flexible employment to access these insurances in the locality where they work even. In few megacities where this cannot be achieved in one step, the megacities shall in combination with local reality actively create conditions to gradually lift the hukou/household registration restrictions for the flexibly employed to enroll in these insurance schemes in places where they work.
We shall organize people in flexible employment to enroll in basic endowment/pension and medical insurance schemes if they haven’t, to make sure that whoever should have enrolled is enrolled.
Enterprises shall participate in social insurance schemes. They shall guide and support workers in new forms of employment who do not fully meet the conditions for establishing employment relations to participate in relevant social insurance schemes according to their own conditions.
Note: The much-maligned linkage of hukou/household registration and social benefits are further broken here.
When participating in social insurance schemes in China, the employer and the employee share the burden of paying the premium.
(9) We shall advance occupational injury insurance and carry out pilot programs for people in new forms of employment. Platform enterprises should participate in the trials with the focus on sectors like traveling, food delivery, instant delivery and intra-city freight. We shall establish and improve norms of management and services and operating mechanisms for occupational injury insurance, combing the leading role of the government with informatization and public participation. Platform enterprises are encouraged to purchase commercial insurance such as personal accident insurance and employers’ liability insurance to better protect the flexible employees on the platform.
Note: This is about protecting flexible workers against accidents. Insurance companies selling accident insurance and employers’ liability policies could benefit from the requirement.
(10) We shall supervise the enterprises to formulate and revise platform rules and algorithms in areas like entry to and exit from the platform, order distribution, unit price for each delivery, commission/revenue sharing, remuneration composition and payment method, rewards and punishments and working hours that are directly related to the workers’ rights and interests. The enterprises should take full account of the views and suggestions from the trade unions or the representatives of the workers, make public the handling results and inform the workers of the results. The enterprises shall actively respond to the negotiation requests from the trade unions or labor representatives and provide necessary information and documents. We shall guide the enterprises to establish and improve labor complaint mechanisms to ensure that the employees' complaints are responded in a timely manner and addressed objectively and fairly.
Note: The tech companies are asked to take full account of the views and suggestions from the trade unions or the representatives of the workers.
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Improve efficiency and optimize services for protecting workers' rights and interests
(11) New approaches are adopted to provide services for workers in new forms of employment, such as personalized occupation introduction, vocational guidance, and entrepreneurship training. We shall timely release information concerning wages and labor costs, provide advisory services about labor security, taxation, and market regulation to facilitate the employment of the workers and the recruitment of the enterprises.
(12) We shall optimize the services facilitating participation in social insurance, and explore the service models suitable for the new forms of employment. More convenient services will be provided in social insurance premium payment, inquiries, as well as benefits receiving and account settlement. We shall do well in the transfer of social insurance account (from one region to another), improving services to better ensure that those enrolled in social insurance fairly enjoy the social insurance benefits.
Note: The logistics in participation in and delivery of social insurance are no small task, as, to repeat, Premier Li Keqiang said China counts over 200 million flexible workers and a 2021 report by the State Information Center counted 84 million workers in the “sharing economy” which includes food delivery, car-hailing, office sharing, accommodation, etc.
(13)A vocational skill training model tailored for workers in new forms of employment should be established, and their equal right to training should be protected. For those who participate in vocational skill training in the place where they work, the application and distribution of vocational skill training subsidies should be optimized. Meanwhile, we will step up efforts to directly subsidize enterprises with training subsidy funds. Those who meet the requirements should be given vocational skill training subsidies according to the regulations. We will refine the grading system of vocational skills and support qualified enterprises in ascertaining vocational skill grades by rule. We will improve the policy for evaluating professional titles, and open up channels for workers in new forms of employment to apply for and evaluate their professional titles.
（14）In order to make the life and work more convenient for workers in new forms of employment, we shall speed up the construction of comprehensive service sites in the cities, and promote the establishment of temporary rest places in residential and commercial areas where these workers are concentrated, thus solving problems such as parking, charging, drinking water, and going to the restroom.
Note: It is actually quite practical - if you are constantly delivering food or driving a cab, where do you go for water and toilets?
(15) For the children of the workers in new employment forms who met certain conditions, we shall safeguard that they have the equal right to compulsory education in the locality where they reside. Public cultural and sports facilities are encouraged to open to the workers free of charge or at low rates, and the supply of public cultural products and services shall be diversified.
Note: This further breaks the linkage of hukou/household registration and social benefits - for the flexible worker who met certain conditions.
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Work together and improve the working mechanism for protecting workers' rights and interests.
(16) Safeguarding the rights and interests of workers in new forms of employment is an important part of keeping employment stable, improving people's well-being, and strengthening social governance. All regions should strengthen the organizational leadership and accountability, making solid efforts in the protection of the rights and interests of workers in new forms of employment. The Ministry of Human Resources and Social Security, the National Development and Reform Commission, the Ministry of Transport, the Ministry of Emergency Management, the State Administration for Market Regulation, the National Healthcare Security Administration, the Supreme People's Court, the All-China Federation of Trade Unions and other departments and units should earnestly perform their duties, strengthen coordination, incorporate the rights and interests of the workers into a digital economy collaborative governance system. Also, the system of reporting on the employment situation of platform enterprises shall be established. We will improve the joint reward and punishment mechanism for protecting workers' rights and interests, and optimize relevant policies, measures, and judicial interpretations.
Note: All of them will do their part.
(17) Trade unions at all levels should strengthen their organization management, ensure the effective coverage of their work, expand the scope of rights protection and services, and actively attract workers in new forms of employment to join them. We will strengthen the ideological and political guidance on the workers and guide them to protect their rights and interests in a rational and lawful manner. The enterprises shall be supervised to fulfill their employment responsibilities, safeguard the rights and interests of the workers. Efforts should be made on the part of the trade unions to negotiate with industry associations, leading enterprises, or enterprise representatives, sign industry-wide collective contracts or agreements, and promote the formulation of industry-wide labor standards.
Note: Job for the Chinese trade union.
(18) Courts at all levels, as well as mediation and arbitration institutions on employment disputes, shall step up guidance on handling labor disputes, smoothen the connection between arbitration and adjudication, affirm the relationship between enterprises and workers on the basis of facts in employment, and handle cases regarding labor rights and interests for workers in new employment forms according to laws and regulations. Mediation institutions, legal aid agencies, and other specialized social institutions shall provide more convenient, high-quality, and efficient services such as dispute mediation, legal consultancy, and legal aid for workers in new forms of employment in accordance with the law.
Note: Substance over form, when disputes arise - the flexible workers’ relationship with the enterprises shall be based on facts.
(19) The administrative departments for human resources and social security at all levels should strengthen the oversight on labor security, supervise the enterprises to fulfill their duties of protecting the rights and interests of workers in new forms of employment. Efforts should be made to solve prominent problems, like delayed payment for wages and illegal overtime work, and protect the rights and interests of workers by law. Relevant departments in charge of transport, emergency management, as well as market regulation at all levels should regulate the business operations, strengthen supervision, timely investigate all kinds of interests-violating cases and hold regulatory talk with and give due punishment to enterprises involved.
Note: Delayed payment for wages and illegal overtime time are prominent problems. Tech companies being invited for tea by the named regulators, including in different regions, shall not be a surprise.
All relevant departments in all regions shall earnestly implement the guidance and rolled out specific measures. Also, the publicity of the above policies should be strengthened to positively guide public opinion. We shall enhance the sense of honor of the workers in new employment forms towards their profession and create a sound environment where all labor rights and interests are well-protected.
The translation is by Alexander Wang, a contributor. The introduction and notes are by Zichen Wang, founder of Pekingnology.