Local governments across China are ignoring labor law violations to boost the economy by helping struggling businesses.
Dozens of cities and provinces recently announced grace periods for “minor” violations, such as: B. Enforcing dangerously long hours or discriminating on the basis of gender and ethnic origin during the hiring process.
The relief for employers is aimed at “improving” the business environment and creating a “rounded regulatory system,” according to officials, as President Xi Jinping’s controversial zero-Covid policy weighs on the world’s second-biggest economy.
However, the move seems to give more weight to supporting businesses than Xi’s high-profile “shared prosperity” aspiration to reduce social inequality.
Streets in Shanghai and Beijing are often empty as the former slowly ease a two-month lockdown and the capital tightens restrictions to stamp out new cases.
The effective immunity offered by local governments accompanies central government efforts to increase lending and tax breaks – the latest of which was announced by the State Council, China’s cabinet, on Monday.
Bankers and business owners say there is little demand for credit in lockdown-hit regions, while tax refunds are often hard to claim due to conditions set by strapped local governments.
Last month, human resources and social security officials in eastern Jiangsu Province, an economic and export hub bordering Shanghai, said they would refrain from holding employers accountable for 16 “minor” crimes. These included confiscating identity cards to make it difficult for them to leave the country and requiring applicants to pay a fee to apply for a job.
According to a statement from Jiangsu’s Human Resources and Social Insurance Department, the initiative would help “stimulate entrepreneurship, improve law enforcement and create a stable, fair and predictable business environment.” Xi, on the other hand, has repeatedly warned against a “disorderly expansion of capital” over the past year.
Lawyers and business owners in Nanjing, capital of Jiangsu, and other regions said judges and arbitrators who previously ruled largely in favor of workers are now more likely to support employers.
Dave Liu, a Nanjing-based arbitrator, said workers in his jurisdiction have won only about 10 percent of wage rebate cases in recent months, a sharp reversal from last year when their win rate was nearly 100 percent.
“Although the wording of the law hasn’t changed, enforcement leans toward employers,” Liu said.
He added that when times are tough, workers sometimes have to make a “small sacrifice to protect the common good.”
“If one company goes under because of over-regulation, everyone loses,” Liu added. “The best way to protect employees’ interests is to keep the employer alive.”
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Wang Li’na, a marketing assistant in Wuhan, said she struggled to file complaints against her boss over mandatory overtime after officials announced a grace period for employers who force employees to work overtime. “It’s ordinary workers, rather than bosses, who are bearing the brunt of the economic recession,” Wang said.
The owner of a food factory in Zhangzhou, a city in southeast Fujian province, said he can now pay workers a fraction of what he paid last year for work-related injuries. “I was once forced to give more than Rmb200,000 (US$30,000) to a newly hired worker after he injured his hand,” said Martin Lin.
Some experts warned that local government support for employers at the expense of workers could undermine another priority for Xi – social stability – as he prepares to serve an unprecedented third term this year.
“China’s attempts to revive the economy typically support businesses but not workers,” said Mary Gallagher, China labor expert at the University of Michigan. “This could lead to labor unrest as the economy begins to recover.”
Additional reporting by Tom Mitchell in Singapore
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