China's New Labor Law. On The Mat, But Not Down For The Count.

In early December, 2008, in "China's New Labor Contract Law. Harmonized Out Of Existence?"we wrote about hearing from clients how local officials were giving them broad hints that they would not be too tough on enforcing China's new Labor Contract Law, so long as those companies maintained their employment numbers. We covered this issue again, in "China's Labor Laws. Worry Me Or Worry Me Not," a few weeks ago, after more clients reported the same thing to us.

For those seeking additional confirmation that China is going to be loosening up on its enforcement of its labor laws, the Wall Street Journal just did a story, entitled, "Factory Closures Strain China's Labor Law."

Again, though, our position is that foreign companies will almost certainly be required to continue to abide by at least some portions of the new labor law and that it is not a good business practice to violate the labor laws even if promised immunity by local officials. In particular, we believe it remains critical for foreign businesses in China to have a written employee manual (in Chinese) and to have written contracts (again, in Chinese) with all employees.