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Recent Guidance on China's Employment Law
China's Employment Contract Law (ECL), which governs relationships between employers and employees, took effect on Jan. 1, 2008. However, it has become apparent over the years that there are gaps in the ECL and related regulations that create uncertainty in their application. Authorities in different locations often have different views as to how to fill these gaps, resulting in the uneven application of the law. In light of that, the Supreme People's Court, the highest court in China that issues guidance on the application of Chinese law, recently provided a set of clarifications to the ECL.
Below is a discussion of what these new guidelines, known as Interpretation 4, mean for U.S. companies with operations in China.
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