Frontline: China Employment Law Update November 2017

1. The new revision of the Anti-Unfair Competition Law of the People's Republic of China has been adopted, including provisions with regard to trade secrets, commercial bribery and other aspects.
2. There have been updates to regional minimum monthly and hourly salary levels with a national average increase of 10.4%.

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Revision to the Anti-Unfair Competition Law of the People's Republic of China

Due to rapid development, the existing PRC Anti-Unfair Competition Law was not fully capable of responding to various acts of unfair competition. In addition, the interrelation of the articles with other laws and regulations created the urgent need to revise the Anti-Unfair Competition Law. In order to conform to the trend of market development, the new revision to the Anti-Unfair Competition Law was adopted at the 30th Session of the Standing Committee of the 12th National People's Congress on November 4, 2017. The revision focuses on detailed methods and investigation procedures relating to acts of unfair competition as well as the corresponding punitive measures, which will come into effect on January 1, 2018.

The revision establishes several updates with regards to the following employment issues:

Trade secrets

• A new definition in Article 9 has clarified that a trade secret is technical or operational information which has "commercial value". In contrast with the "economic benefits and practical value" definition in the 1993 revision, the new revision has removed the requirement of practicality to offer wider protection for the information owned by businesses. Thus, certain trade secrets which seemingly have no practical use, but which have potential economic value, may also be protected under this article.

• Furthermore, the illegal acts that a third party knows or should know of when determining that party's infringement have been made clear, including acts of an employee or former employee of the right owner of trade secrets or any other entity or individual. In this event, although certain businesses may not have obtained trade secrets directly from the employee, they could be punished according to this article if the employee or former employee discloses the trade secret unlawfully.

• More importantly, the cost of the penalty has increased significantly. Article 21 indicates that the penalty for violation of Article 9 will range from RMB 0.1 to 3 million. The maximum penalty has therefore increased considerably compared to the 1993 limit of RMB 0.2 million.

Commercial Bribery

• The original clause of taking bribes and offering bribes has been deleted from Article 7 of the new revision to distinguish from the articles found in Criminal Law. More importantly, the new revision has added "to seek a transaction opportunity or competitive advantage" as the purpose of commercial bribery. This emphasises the competition requirement for this kind of bribe; bribes without such purpose or effect cannot be identified as commercial bribes even if they are made in the course of commercial activities.

• In addition, the potential subjects of commercial bribery have been specified, namely:

1. any employee of the counterparty in a transaction;
2. any entity or individual entrusted by the counterparty in a transaction to handle relevant affairs; or
3. any other entity or individual that takes advantage of their power or influence to manipulate a transaction.

• A new clause states that any employee's act of commercial bribery shall be deemed to be an act of the business operator, unless there is evidence to the contrary. As a result, businesses should be concerned about the risk of being held liable for their employees' acts and pay more attention to the drafting of employment contracts in order to avoid any related risks.

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Local Minimum and Average Monthly Salaries for 2018

On November 1, 2017, the Ministry of Human Resources and Social Security held a press conference for the third quarter of 2017. Human Resources Department spokesman Lu Aihong stated that at the end of October, a total of 17 regions nationwide had adjusted their minimum salary, with an average increase of 10.4%. The highest monthly minimum salary in the country is RMB 2,300 in Shanghai and the highest hourly minimum salary is RMB 22 in Beijing.

The table of monthly minimum salaries in different regions (as of November 2017) is as follows:

Note: The levels of the monthly minimum salary in some regions are determined by the level of local economic development and local living costs.

Region	Implementation date	New minimum salary levels in RMB (monthly)
		Level 1	Level 2	Level 3	Level 4	Level 5
Beijing	2017.09.01	2000
Shanghai	2017.04.01	2300
Guangdong	2015.05.01	1895	1510	1350	1210
Shenzhen	2017.06.01	2130
Tianjin	2017.07.01	2050
Hebei	2016.07.01	1650	1590	1480	1380
Shanxi	2017.10.01	1700	1600	1500	1400
Inner Mongolia	2017.08.01	1760	1660	1560	1460
Liaoning	2016.01.01	1530	1320	1200	1020
Jilin	2017.10.01	1780	1680	1580	1480
Heilongjiang	2015.10.01	1480	1450	1270	1120	1030
Jiangsu	2017.07.01	1890	1720	1520
Zhejiang	2015.11.01	1860	1660	1530	1380
Anhui	2015.11.01	1520	1350	1250	1150
Fujian	2017.07.01	1700	1650	1500	1380	1280
Jiangxi	2015.10.01	1530	1430	1340	1180
Shandong	2017.06.01	1810	1640	1470
Henan	2017.10.01	1720	1570	1420
Hubei	2017.11.01	1750	1500	1380	1250
Hunan	2017.07.01	1580	1430	1280	1130
Guangxi	2015.01.01	1400	1210	1085	1000
Hainan	2016.05.01	1430	1330	1280
Chongqing	2016.01.01	1500	1400
Sichuan	2015.07.01	1500	1380	1260
Guizhou	2017.07.01	1680	1570	1470
Yunnan	2015.09.01	1570	1400	1180
Xizang	2015.01.01	1400
Shaanxi	2017.05.01	1680	1580	1480	1380
Gansu	2017.06.01	1620	1570	1520	1470
Qinghai	2017.05.01	1500
Ningxia	2017.10.01	1660	1560	1480
Xinjiang	2015.07.01	1670	1470	1390	1310