China’s Labor Contract Law went into effect on January 1, 2008. The law requires that all employers sign a written contract with employers, and the contract should stipulate wages, length of contract, insurance, etc. A major objective of the law is to protect the rights of workers, especially rural-urban migrant workers. Rural-urban migrant workers are citizens of rural areas who move to cities to find work. Many migrant workers face significant problems, such as low wages, unsafe working conditions, lack of social security insurance, and hiring discrimination. These problems result mainly from systemic factors, such as policies that prevented farmers from moving to cities to work and economic policies that diverted resources from the countryside to the urban areas.
In order to assess the impact of the new labor contract law on migrant workers, from October 2008 to January 2009 the author interviewed 41 migrant workers at “Xin Shi Min Zhi Jia,”a Qingdao non-profit that provides free legal services to Qingdao migrant workers. The most significant result is that 30 of the 41 people interviewed do not have insurance. Insurance includes retirement insurance, medical insurance, unemployment insurance, workers’ compensation insurance, and maternity insurance. Because the author interviewed a limited number of migrant workers, it is difficult to judge whether their problems are representative of migrant workers across the country. The author compared these results with 2007 labor dispute statistics for Shandong Province, in which Qingdao is located, and for China nationally. At the national level, insurance disputes were the second most common type of dispute, while for Shandong insurance disputes were the most common type of dispute.
Many employers are not willing to provide insurance as required by law because it is a financial burden, and many migrant workers are not willing to buy insurance policies because when they return to the countryside the policies cannot be transferred. Most migrant workers have low wages, which means that it would take relatively longer to establish an insurance system in which they would receive adequate benefits. In addition to the insurance problem, more than half of the people interviewed signed an employment contract but still experienced a labor dispute. This means that refusing to sign a contract was not the most common way for employers to avoid the law. In evaluating the effectiveness of the Labor Contract Law, it is essential to compare results from different geographical areas and different industries. The author hopes that the results of this study will contribute to a better understanding of implementation of the Labor Contract Law.