The US-China Business Council's Position on
China's Proposed Labor Contract Law
Washington, DC, April 5, 2007 - A group called Global Labor Strategies has repeatedly mischaracterized the US-China Business Council (USCBC) position on China's proposed new Labor Contract Law. The group's mischaracterization has been picked up by others, including Washington Post columnist Harold Meyerson, who chose not to reach out to USCBC before simply repeating Global Labor Strategies' false representation in a column that appeared yesterday. USCBC has already sent a letter to the editor to the Washington Post and is pursuing other channels to make sure our position is clear and not misunderstood.
To be absolutely clear:
- USCBC supports a balanced and fair Labor Contract Law and the transparent process by which it has been developed. USCBC is not lobbying against the law.
- China's 1995 Labor Law already requires contracts to be signed with employees. USCBC members, and US companies more generally, have been signing contracts with workers for over a decade. Better enforcement of the existing Labor Law would solve many of the labor practice problems in China.
- USCBC submitted comments on specific clauses in the draft law at the request of China's National People's Congress (NPC), as did employers, unions, and employees. In fact, the NPC received more than 190,000 comment submissions, including ours.
- In USCBC's view, certain provisions in the draft law need revision to ensure they do not adversely affect both companies and employees. Our comment submissions detail our recommendations.
- The fact that many of USCBC's first set of comments, submitted last year, are reflected in the latest draft of the law indicates that the PRC government understood the spirit in which the comments were offered--that is, that the goal of our comments was to contribute to the government's development of a fair and effective employment contract law.
- China indeed has many substandard labor practices. Substandard employment and environment, health, and safety (EHS) practices typically occur in local enterprises and sometimes in enterprises owned by other foreign investors, but rarely in enterprises directly owned by US companies.
- US companies are part of the solution, not the problem. US companies tend to bring their global employment and EHS practices and standards to their facilities in China. In most cases, these practices and standards exceed local law. US companies generally act as models for the improvement of employment and EHS standards in China.
USCBC submitted two sets of comments on the draft Labor Contract Law: once in April 2006 and once in January 2007. The substance of these comments has been misrepresented as well. To see USCBC's actual submissions, please see: