As we step further into 2013, China continues to reveal more measures addressing the illegal employment of foreign nationals. According to an interpretation of labor laws issued by the Supreme People’s Court of China, as of February 1, 2013, Chinese courts no longer recognize a “labor relationship” between an employer and a foreign national without a work permit. This is true even if the foreign national is under an employment contract.
A work permit is a legal work authorization document issued to a foreign national by his or her local labor bureau. The Supreme People’s Court’s reasoning is that a foreign national who does not have a valid work permit is not a “qualified laborer” and therefore cannot establish a “labor relationship” with an employer. For foreign nationals who are working in China without a proper work permit, this interpretation means that they can no longer seek protection from the courts regarding their “legal relationship,” which encompasses labor rights such as social insurance, health care, double pay for overtime, and compensation for work injuries under Chinese law. Such foreign nationals may, however, win a labor dispute over unpaid wages for services already rendered under a labor contract. Foreign experts who have obtained valid Foreign Expert Permits are not subject to this restriction.
In addition, the Beijing Labor Bureau recently implemented a new requirement on Alien Employment License applications. In general, an Employment License application is the first of a series of applications required to obtain work and residence authorization for foreign nationals who seek to work and live in China. Issuance of employment licenses and work permits is within the authority of local labor bureaus. Regulations and policies on work and residence authorization differ from locality to locality. Effective February 1, 2013, Beijing began to require that an employee of a Beijing sponsoring company who acts as the company representative must physically appear at the Beijing Labor Bureau to submit the Employment License application. Beijing companies can no longer send only a filing agent or a third party to the Bureau to submit this application. At the bureau, the company representative is required to present a valid government ID, a work ID (such as a business card, door card, or company badge), and a letter from the company addressed to the reviewing Labor Bureau officer confirming the company representative’s name, position, and ability to file the application on behalf of the company. The company representative may be asked to answer any questions the authorities may have regarding the foreign national’s recruitment, such as details about the nominated position or the prospective foreign employee’s relevant work experience. This new requirement is intended to prevent illegal applications and strengthen the administration of employment of foreign nationals in Beijing.