China: Authorities Tighten Enforcement Under New Immigration Law

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By Leslie A. Pappas

Sept. 25—Backed by a revised immigration law and endowed with new powers to enforce it, Chinese authorities are increasing scrutiny of foreign employees and their work, a speaker told a conference of human resource managers in Beijing on Sept. 23.

Increasingly vigorous enforcement of China's revised Exit and Entry Administration Law, which went into effect July 1 of last year, demands that companies become more aware of the new regulations and take steps to ensure that employees comply with the rules, Wendy Xie, senior account manager at Fragomen, a global immigration law firm, said at a conference sponsored by the Society for Human Resource Management.

“You have to understand the new requirements whether you are a foreign employee or not,” said Xie, who works in Fragomen's Shanghai office. “All directors and managers should know the new requirements of the new law and consequences of noncompliance. Knowing this will minimize the risk.”

New Fines, More Audits

Under the new rules, employers who hire workers illegally could be fined up to 100,000 yuan ($16,000).

Among the new powers of enforcement granted authorities, local public security has the right to question on the spot an individual suspected of violating the regulations. Individuals may be detained for investigation, repatriated without a hearing and prohibited from entering China for up to five years, Xie said.

The past year has seen increased auditing of worksites by plain-clothed police, who may come into the workplace and ask employees to see work or residence permits, Xie said, adding that “a workplace inspection might also take place at the homes of foreign workers.”

‘Illegal Employment' Defined

The new law clarifies the meaning of the term “illegal employment,” which is defined as either working in China without obtaining the proper work and residence permits or working beyond the scope prescribed in the work permits, according to Xie, who highlighted the recent case of a foreign teacher in Harbin who was found to be teaching at more than one school. The teacher's work permit was limited to one school, so employment at the second school without additional documentation was illegal.

The increased scrutiny has also brought more rigorous enforcement of the 90-day rule for business visitors. Travelers on a business visa may not stay more than 90 days in China within a one-year period and are limited in their activities.

Now, “if you stay for more than 90 days, you will be considered to be employed in China,” Xie said. “There is an increased government focus on short-term business entry as an area of significant noncompliance.”

Under the new law, changes of circumstances affecting residence permits—such as change of residential address, passport number or employer—must be reported within 10 days. Foreigners must register within 24 hours of arriving in China at the local Public Security Bureau and are required to carry their original work permit and resident permit with them at all times.

‘Compliance Should Always Win Out'

Companies should raise awareness among employees about the new law and take steps to make sure employees follow through, Xie said.

Procedural compliance is particularly important. For example, managers should assign a person to be responsible for Public Security Bureau registration, corporate business license registration and timely filing of applications.

Employers should maintain detailed records of employee work authorization documents and time spent in China on business visas and should verify that existing employees are in fact authorized to work at their current locations.

Employers should also manage the risk of business travelers, making sure to get the right type of visa, obtain work authorization if required and take into account the history of the employee's travels in China to avoid going past the 90-day limit, Xie said.

“Do not allow compliance to suffer in favor of efficiency,” she warned. “Compliance should always win out.”

To contact the reporter on this story: Leslie A. Pappas in Beijing at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com