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Around the Web – Chinese recruitment firms must set up emergency outsourcing fund

13 June 2012

A new regulation in China aimed to clean up the industry has a significant impact on recruitment firms outsourcing workers abroad as they will have to set up a security fund of at least three million Yuan (€379,200) in cases of emergencies, evacuation or if contracts fail, writes the China Daily.

As well as requiring recruitment firms to open a separate bank account to compensate workers should they fail to comply with their responsibilities, this new regulation is also intended to help to standardise the process of outsourcing workers abroad.

Recent evacuations of Chinese workers have, for instance, taken place in Libya last year during national unrests.   

Recruitment firms which outsource workers abroad will also have to have at least six million Yuan (€758,385) in registered capital, something which could stop some firms from operating in this business, the paper writes.

“It is necessary to set a threshold for the registered capital assets, for the government has to consider whether the company will be capable of helping workers during emergencies,” said  Yin Guangjun, vice-president of the Cangzhou subcouncil of the China Council for Promotion of International Trade.

The State Council's Legislative Affairs Office and the Ministry of Commerce warned that increased demand of labour outsourcing has also led to illegal practices, putting workers at risk, which is something the new regulation aims to prevent.

Official figures by the Ministry of Commerce show that in March, China had around 809,000 workers employed abroad, seeing an increase of 40,000 since last year. Construction workers are amongst those particularly high in demand.


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