"The Impact of China's Labor Contract Law on Workers" by ILRF

The International Labor Rights Forum (ILRF) released a report recently entitled "The Impact of China's Labor Contract Law on Workers." ILRF is a nonprofit advocacy organization headquartered in Washington, DC that describes itself as "an advocate for and with the working poor around the world".

According to Manfred Elfstrom, Program Officer of the International Labor Rights Forum, key findings of the report include:

More workers have signed contracts since the LCL went into effect, but the number with contracts is still exceedingly low, at least in the regions surveyed, considering that the law requires that all employees have a formal contract. Sixty percent of the interviewees had a contract at the time of their interview; 53 percent said that they had contracts before the law went into effect. Many workers interviewed during the course of this research complained that their contracts lacked provisions required by the LCL.
Enrollment in work injury insurance has increased significantly. Among interviewees, the percentage with insurance increased from 39.5 percent to 49.5 percent after the LCL went into effect. Again, this is still well below the 100 percent required by law.
The law has helped older workers less than it has younger workers, as illustrated by the gradual decline by age in the number of workers with labor contracts and social insurance. While 66 percent of workers ages 16-24 had a labor contract at the time of their interviews, for example, this percentage dropped to 64 percent for ages 25-32, 60 percent for ages 33-40, and 56 percent for workers ages 41-52.
In general, the workers interviewed relied on mass media such as television (64 percent), newspapers (46.6 percent), and the Internet (44.7 percent) as their primary source of legal information. Workers relied on informal sources, as well, such as friends (30.8 percent) and other workers (26.5 percent). Sources varied widely according to other variables, such as age and education, with older or less educated workers relying much more heavily on informal sources.
Labor protections seemed to vary widely by industry. While our small sample size for some industries may have biased our results, we noted very sharp differences between, say, workers in the furniture and hardware sector, who were least likely to enjoy social insurance (35 percent) or contracts (50 percent), and, say, service sector workers, who fared the best in our survey (74 percent of whom had insurance).
Interviews with management revealed fear of certain provisions of the law, such as open-ended contracts, but also an appreciation of the stability that the LCL could bring to Chinese labor relations more generally.

These findings have led ILRF to recommend tougher criminal and civil sanctions against business owners who refuse to sign contracts, a greater focus by the All China Federation of Trade Unions and others not only on contract coverage but on the process of signing contracts (including new avenues for collective bargaining), community-based approaches to legal education aimed at reaching older workers in particular, expanded access to affordable legal representation for workers, more monitoring of less-branded parts of supply chains, and attention to the positive aspects of the law for responsible businesses.

The report, which is based on interviews with hundreds of migrant workers and managers in the Pearl River Delta and Yangtze River Delta, is available online at: http://www.laborrights.org/creating-a-sweatfree-world/rule-of-law/china-program/resources/12318.

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