In March 2022, the outbreak of the epidemic in Shanghai caused most enterprises to stop production. As the epidemic was gradually controlled, Shanghai has successively released a number of "white lists" of enterprises that resumed work and production. Meanwhile, Shanghai and various districts have also issued guidelines for industrial and commercial enterprises to resume work and production. However, enterprises that resumed work and production are limited to five categories: urban operation support, epidemic prevention material support, important function support, continuous production operations, and supporting infrastructure support. In a short period of time, employees of enterprises that have resumed work may not be able to return to work normally due to epidemic prevention and control measures, resulting in short-term job shortages in enterprises that have resumed work, while a large number of labor forces in enterprises that have not yet resumed work are idle. Under this short-term employment conflict, if the idle labor force of enterprises that have not yet resumed work is transferred to those that have not yet resumed work, on the one hand, it can help the enterprises that have resumed work to resume production smoothly; On the other hand, enterprises that have not resumed work can continue to enjoy employment subsidy support, reducing the pressure on wage payment. The author of this article analyzes the legal relationship under the "shared employment" model in order to provide guidance for enterprises to share employment.
What is "shared employment"?

"Shared employment" is essentially the transfer and borrowing of labor between enterprises. As early as 1995, the original Ministry of Labor issued the Opinions on Several Issues Concerning the Implementation of the Labor Law of the People's Republic of China (LBF [1995] No. 309), which stipulated the issue of employee borrowing between enterprises.

What is the difference between "shared employment" and labor dispatch?

What is the relationship between lending enterprises, job vacancies, and employees in the "shared employment" mode?

Under the "shared employment" mode, the labor relationship and social security relationship between employees and the lending enterprise do not change, and the labor relationship between employees and the unemployed enterprise is not established due to borrowing. A cooperative relationship is established between the lending enterprise and the employee shortage enterprise, and the two parties conduct employee surplus and shortage adjustment based on the cooperative relationship.

Can a lending enterprise lend employees for profit?

A lending enterprise shall not lend employees for the purpose of making profits, illegally carry out labor dispatch in the name of shared employment, evade relevant regulations on labor dispatch, or arrange dispatched employees working in its own unit to work in other units in the name of shared employment.

5. Who will bear the liability for industrial injury insurance in the event of an industrial injury accident to a loaned employee?

According to Article 43 (3) of the "Regulations on Industrial Injury Insurance", if an employee is injured by an industrial injury accident during his or her secondment, the original employer shall bear the liability for industrial injury insurance, but the original employer and the secondment unit may agree on compensation methods. According to this regulation, if a loaner is injured by an industrial injury accident while working in a jobless enterprise, the loaning enterprise shall bear the liability for industrial injury insurance, but the loaning enterprise and the jobless enterprise may agree on compensation measures for industrial injury.

6. Is it a case where the lending enterprise lends out employees due to changes in the labor contract?

Of. When a lending enterprise lends employees to an enterprise that lacks workers, the main contents of the labor contract, including work content and location, working hours, labor protection, labor conditions, and occupational hazard protection, may change, so it is a case of labor contract change.

Should the lending enterprise sign a labor contract change agreement before lending employees?

As in question 6, the situation where a lending enterprise lends employees to an enterprise that lacks workers belongs to a change in the labor contract. According to the Labor Contract Law, changes to labor contracts should be made in writing. Therefore, before lending an employee, the lending enterprise should inform the employee of the specific situation of the enterprise where the employee is absent and the relevant rights and obligations involved, and sign a labor contract change agreement with the employee in writing. The change agreement shall specify the company, job position, work content, working conditions, work location, working hours, labor remuneration, labor protection conditions, obligations to comply with the rules and regulations of the company, and other relevant contents related to the immediate interests of employees. The lending company and the employee shall each hold one copy of the change agreement.

8. Can a jobless enterprise return employees from a lending enterprise?

Lending enterprises, job shortage enterprises, and employees can agree in advance on specific circumstances for returning employees without violating laws, regulations, and relevant policies, such as serious violations of the rules and regulations of the job shortage enterprise or incompetence in the work arranged by the job shortage enterprise. If the employee meets the relevant circumstances or reaches a consensus afterwards, the enterprise that lacks the employee may return the employee to the lending enterprise.

What should be included in the employee borrowing cooperation agreement signed between the lending enterprise and the jobless enterprise?

The cooperation agreement may specify the number, time, work location, work content, rest, labor protection conditions, labor remuneration standards, payment time and method, accommodation arrangements, circumstances that can be returned to employees, division of responsibilities and compensation methods for employees after industrial injury, and settlement of transportation and other expenses.

10. What obligations should employees fulfill under the shared employment model?

(1) Abide by the rules and regulations formulated by the enterprises that lack employment according to law;

(2) Obey the work arrangements of the enterprises with job vacancies, and actively participate in pre job and post transfer training organized by the enterprises with job vacancies;
(3) If, after the expiration of the shared employment cooperation, the borrower fails to return to the lending enterprise or illegally terminates the labor contract, causing losses to the lending enterprise, the borrower shall be liable for compensation according to law.

11. What obligations should employers fulfill under the shared employment model?

(1) Truthfully inform employees and lending enterprises of their work content, working conditions, workplace, occupational hazards, safety production status, labor remuneration, enterprise rules and regulations, and other information that employees need to know;

(2) Reasonably arrange employees' working hours and tasks, ensure their rights to rest and vacation, and provide labor safety and health conditions that meet national regulations and necessary labor protection equipment;

(3) Timely settle the labor remuneration of employees to the lending enterprise;

(4) If an employee suffers an industrial injury accident during the work period, he/she shall compensate the lending enterprise in accordance with the agreement, and assist the lending enterprise in completing work injury identification and other work;

(5) Recruiting employees who have not yet terminated or terminated their labor contracts with the lending enterprise, and who cause losses to the lending enterprise, shall bear joint and several liability for compensation.

12. What obligations should the lending enterprise fulfill under the shared employment mode?

(1) Pay employees' labor remuneration and social insurance premiums in full and on time, and do not withhold employees' labor remuneration or collect fees under any name;

(2) Track and understand the work situation and relevant demands of employees in the enterprises with job vacancies, and timely help employees solve difficulties and problems in their work;

(3) If an employee suffers from an industrial injury accident while working in a jobless enterprise, he/she shall bear the liability for industrial injury insurance in accordance with Article 43 (3) of the Regulations on Industrial Injury Insurance, and the compensation method may be agreed with the jobless enterprise;

(4) If an employee requests to return to a company that lacks work and fails to fulfill the employee's rights and interests protection obligations as agreed, the company shall not refuse to accept the employee;

(5) When an employee seriously violates the rules and regulations of the absent employee enterprise, is incompetent in the work, or meets the circumstances that can be returned as agreed in the cooperation agreement, the absent employee enterprise shall not be refused to return the employee;

(6) Upon expiration of the shared employment cooperation, timely receive and arrange employees.

13. How to determine the arbitration subject during the labor dispute arbitration stage for labor disputes arising from "shared employment"?

According to Article 7 of the "Guidelines for Shanghai Shared Employment Guidance and Service Work" (HR&S Guan [2021] No. 44), "Issues Concerning the Handling of Labor Disputes Caused by Shared Employment", during the period of shared employment, employees and lending enterprises are still treated as a single labor relationship. When handling labor disputes involving shared employment, labor and personnel dispute mediation and arbitration institutions may list the enterprises that lack employment as a third party,

14. How can enterprises obtain shared employment information?

Enterprises can register employee surplus and shortage information through public employment service platforms at all levels in Shanghai, such as "Leye Shanghai" WeChat official account, to realize employee sharing among enterprises.

On March 27, 2022, the Shanghai Municipal Bureau of Human Resources and Social Security issued the Notice on Printing and Distributing Several Policies and Measures to Fully Support the Fight against the Epidemic in the Field of Human Resources and Social Security in this Municipality (H.R.S.G. [2022] No. 10), which stipulates in Article 4 that employers should be supported in adopting shared employment and other modes to resolve short-term employment structural conflicts. Establish a shared employment and coordination platform between enterprises, help and guide the establishment of employment and coordination systems between enterprises with similar industries and positions, and achieve optimal allocation of human resources. Those who share employment with other enterprises during the epidemic period can continue to enjoy corresponding employment subsidy support. It can be seen that the Shanghai Municipal Bureau of Human Resources and Social Security explicitly supports enterprises to adopt a shared employment model to address short-term employment structural conflicts caused by the epidemic, in order to help enterprises achieve an early resumption of work and production.