Summary of Law Updates:

Labour

1. < Notice on Wage Calculation and Payment for Labourers Scheduled to Work on the Holiday of 3rd September 2015 > (2015-08-18)

The Notice on Wage Calculation and Payment for Labourers Scheduled to Work on the Holiday of 3rd September 2015 (hereinafter referred to as Notice) was gazetted by the Ministry of Human Resources and Social Security on 18th August, 2015. It is applicable to the issue of wage calculation and payment for working on the holiday of 3rd September, 2015 (the 70th Anniversary of China’s Victory on Defence in the World War II).

The Notice provided that, for operational need, the employer scheduled labourer(s) to work on the holiday of 3rd September, shall pay normal wages and arrange compensation leave; if compensation leave is not arranged, the employer shall pay wages by no less than 200% of the labourer’s daily or hourly wage standard.

2. < Notice on Premium Rate Adjustment of Employment Injury Insurance > (2015-10-01)

The Notice on Premium Rate Adjustment of Employment Injury Insurance (hereinafter referred to as Notice) was gazetted by the Ministry of Human Resources and Social Security and the Ministry of Finance on 22nd July, 2015 and it will come into force on 1st October, 2015.

Comparing with current premium rate policy, the following adjustments are made,

• Re-classification of industries. The industries are re-classified from 3 classes into 8 classes according to different risk levels of employment injury attached to each industry;
• Differentiated the premium rate for different industries. On the basis of re-classification of industries, the standard premium rates are adjusted to 0.2%, 0.4%, 0.7%, 0.9%, 1.1%, 1.3%, 1.6% and 1.9% of the aggregate wages the employer paid to all its employees according to the class in which it is classified;
• Premium rate for each class. Premium rate for Class 1 can be floated to 120% or 150% of the standard premium rate.
  Premium rates for Classes 2 to 8 can be floated to 120%, 150%, 80% or 50%, of the standard premium rates.
  The purpose of the premium rate adjustment of employment injury is to achieve “overall reduction”, and alleviate the burden of the enterprises.

3. < Notice on Premium Rate Reduction of Maternity Insurance > (2015-10-01)

The Notice on Premium Rate Reduction of Maternity Insurance (hereinafter referred to as Notice) was gazetted by the Ministry of Human Resources and Social Security and the Ministry of Finance on 27th July, 2015 and it will come into force on 1st October, 2015.

The Notice provided that the balance of maternity insurance funds shall be equivalent to the disbursement of 6 to 9 months. In those regions having balances exceeding 9 months, the premium rate of maternity insurance shall be reduced to 0.5% or below of the aggregate wages an employer paid to all its employees. The general principle is to balance and equalize levy and disbursement per recent years’ pattern.

The Notice required local regions carry out the research on premium rate reduction of maternity insurance as soon as possible, to formulate measures or work programs by the end of September, and to ensure the completion of premium rate reduction of maternity insurance before 1st October.

Health and Safety

1. < Fire Safety Signage - Part 1: Signage > GB13495.1-2015 (2015-08-01)

The national standard Fire Safety Signage - Part 1: Signage GB13495.1-2015 (hereinafter referred to as GB) was amended and gazetted by State Administration of Work Safety on 1th August, 2015, and it has come into force on the date of promulgation. The main changes of the amended GB are as follows:

• As per the GB, fire safety signages are classified into six (6) categories. They are Fire Alarm Installation Signage, Emergency Evacuation Escape Signage, Fire-Fighting Equipment Signage, Prohibition and Warning Signage, Direction Auxiliary Signage and Text Auxiliary Signage, with totally twenty five (25) common signages and two (2) direction auxiliary signages.
• Three (3) new signage, namely, fire telephone, wheeled fire extinguisher and fire monitor were added. Six (6) signages provided in the previous version were renamed from "Emergency Exit, Fire Ladder, Fire Hose, Danger of Fire – Highly Flammable Materials, Danger of Fire – Oxidizing Materials and Danger of Explosion - Explosive Materials" to "Exit, Escape Ladder, Fire Hose Reel, Warning: Flammable Material, Warning: Oxidizing Substance and Warning: Explosive Material” respectively.
• The graphics of 12 signages including Fire Button, Exit, Slide, Do Not Obstruct, Fire Extinguisher, Fire Hose Reel, Do Not Extinguish with Water, Direction Auxiliary were amended in the GB.

2. < Administrative Measures on Food Operation Permission > (2015-08-01)

Administrative Measures on Food Operation Permission (hereinafter referred to as Measures) was gazetted by China Food and Drug Administration on 31th August, 2015 and it will come into force on 1st October, 2015. The main requirements of Measures are as follows:

• Food operation permission shall follow the principle of one permit for one site, it means one Food Operation Permit shall be obtained prior to the food operator engages in food business operations in a particular site. Furthermore, the qualification of legal entity such as Business License shall be obtained in advance.
• Food operation permit shall be applied according to the classification of types of business and items of business. The types of business for food operation entities include operator of food sale, operators of catering service and staff canteen.
• The issue date of Food Operation Permit is the date of approval, valid for 5 years. The permit granted before the enforcement of this Measures remains effective within its period of validity.
• Food business operators shall maintain the Food Operation Permit well, it is not allowed to forge, alter, sell, lend, or assign it. Food business operators shall exhibit or place the original Food Operation Permit at the prominent position in the site for business operation.
• If there is change to the stated business items on the Food Operation Permit, the food operator shall apply within 10 days for the change on operation permission from the Department of Food and Drug Administration which originally issued the permit.

The food business operator shall reapply for the Food Operation Permit if the site for business operation is changed. The food business operator shall report to the Department of Food and Drug Administration which originally issued the permit within 10 days if the address of the peripheral warehouse is changed.

3. < Interim Provision on the Management of “Blacklist” for Production and Business Entities with Poor Record in Safety Production > (2015-07-29)

Interim Provision on the Management of “Blacklist” for Production and Business Entities with Poor Record in Safety Production (hereinafter referred to as Provision) was gazetted by the Safety Production Committee of State Council on 29th July, 2015, and it has come into force on date of promulgation. Main contents of the Provision are as follows:

1) Production and business entities falling into one of the following scenarios will be put on the "blacklist" which is managed by the State Administration of Work Safety:

• Serious accident took place, or ten (10) death cases in a year.
• Concealment report forgery, or destroy the scene of accident or related evidences after an accident, or employee is diagnosed to suffer occupational disease or suspected occupational disease.
• Significant potential risk of accident, or the intensity or concentration of occupational hazard factors in the workplace exceeded the standard seriously, and it is pointed out by or rectification is ordered with deadline by the relevant Department of Safety Supervision and Monitoring, but the entity did not rectify on schedule or failed to rectify as per requirements.
• Safety Production Permit being withheld or revoked.
• Other serious breach of laws and regulations on work safety or prevention and control of occupational hazards.

2) Main consequences for production and business entities having been put on the "Blacklist":

• They shall be regarded as targets of supervision and monitoring, and shall be spot checked randomly by regular inquiry and investigation system in secret; the frequency of examination on law enforcement shall be increased, random inspection shall be carried out at least half-yearly, the principle officer shall be interrogated at least annually; severe penalty shall be levied if any new serious breach of laws on safety production.
• They shall be strictly restricted or excluded from, new project approval, land use, permission of mining rights, government procurement, capital raising, policy funds and fiscal and tax policy concession. And the “blacklist” will be an important reference on determination of bank facilities.

Environment

1. < Trial Measures on Emission Charge for Volatile Organic Compounds > (2015-10-01)

The Trial Measures on Emission Charge for Volatile Organic Compounds (VOCs) (hereinafter referred to as Measures) was gazetted by the Ministry of Finance, the National Development and Reform Commission and the Ministry of Environmental Protection on 18th June, 2015, and it will come into force on 1st October, 2015.

The Measures is applicable to the levy, use and management of pollutant discharge fees of VOCs in the petrochemical industry, and packaging and printing industry. The Measures provided the trial industry and enterprises (hereinafter referred to as discharging entity) are liable to pay pollutant discharge fees of VOCs when they discharge VOCs into the atmosphere directly. Discharging entity shall declare the discharge volume of VOCs and pay the pollutant discharge fees to the local administrative department of environmental protection within the prescribed time limit. When the local administrative department of environmental protection found that the discharging entity had made a false declaration and paid insufficient discharge fee, discharge fee shall be recovered and penalty shall be levied pursuant to the relevant provisions of the Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution.

VOCs, is a general designation for organic compounds with characteristic of volatile under certain conditions, mainly including non-methane hydrocarbons (alkane, alkene, alkyne, aromatic hydrocarbon), oxygen-containing organic compounds (aldehyde, ketone, alcohol, ether, etc.), halogenated hydrocarbons, nitrogen-containing compounds, sulfur-containing compounds, etc.

Related provisions on levy standard of pollutant discharge fees for VOCs shall be determined by the National Development and Reform Commission, the Ministry of Finance and the Ministry of Environmental Protection. The local administrative department of environmental protection is responsible to levy pollutant discharge fees of VOCs. At present, no standard and specific measures for the levy of pollutant discharge fees are gazetted. It is suggested to pay attention to the information bulletin of related government departments.

2. < Interim Measures on Revenue Management of Emission Rights Assignment > (2015-10-01)

The Interim Measures on Revenue Management of Emission Rights Assignment (hereinafter referred to as Measures) was gazetted by the Ministry of Finance, the National Development and Reform Commission and the Ministry of Environmental Protection on 23th July, 2015, and it will come into force on 1st October, 2015.

The Measures is applicable to the levy, use and management of revenue from the assignment of emission rights in the trial regions, which are determined by the governments of provinces, self-governing regions, and municipalities directly under the Central Government and are confirmed by the Ministry of Finance, the Ministry of Environmental Protection and the National Development and Reform Commission, to operate the consumptions and trading of emission rights.

The Measures provided that, discharging entities came into existence before the enforcement of the Measures shall continue to be allocated with emission rights. Emission rights for new project, newly increased emission rights for reconstruction or expansion project, and newly increased emission rights needed for the existing discharging entities to meet the requirements of total emission control of pollutants shall be satisfied by assignments between discharging entities through the market. In principle, the period of validity of the emission rights is 5-year; If the discharging entity needs to extend the emission rights upon expiration, it shall pay a royalty fee of emission rights according to the standard approved by the local department of environmental protection.

The net effect is, the practice of emission reduction now becomes capital of enterprises.

China Minimum Wage Standard Update – September 2015

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