Factory Labour Compliance in China: Orientation for Manufacturers

Contracts, hours, and pay

• Written labour contracts on time; Chinese texts governing
• Working-hour systems (standard / comprehensive / flexible) lawfully adopted—not assumed
• Overtime caps and premium pay; attendance system integrity
• Social insurance and housing fund enrolment in the correct location
• Handbooks with lawful democracy procedures where relied upon for discipline

Labour dispatch and outsourcing

• Dispatch percentage and job-type limits for true dispatch
• Outsourcing vs false outsourcing (control tests matter)
• Equal pay themes and joint liability risk with agencies
• Agency licence diligence

Special workforce categories

• Student / intern labour — seasonal peaks are a social-audit flashpoint; follow education and labour rules strictly
• Foreign employees — work permits aligned to the China employer
• Women workers / occupational health — special protection rules in certain posts
• Dormitories — safety and privacy expectations in buyer codes

Restructuring and shutdowns

• Mass layoff procedures and economic grounds documentation
• Mutual termination packages vs unilateral risk
• Coordination with entity liquidation if closing the company
• Preserve payroll and SI evidence for later claims

Buyer social audits

Retail and OEM customers often impose codes beyond statutory minima. Align legal compliance with audit readiness—double books destroy both. See ESG & forced labour roadmap.

Factory HR checklist

• [ ] Contract templates reviewed this year
• [ ] Working-hour system filings/approvals where required
• [ ] Overtime dashboard with legal caps
• [ ] SI/HF full enrolment evidence
• [ ] Dispatch ratio monitored monthly
• [ ] Student labour policy (or ban) documented
• [ ] Grievance channel and anti-harassment process
• [ ] Restructuring playbook pre-cleared with counsel

Counsel

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