Has your employee handbook been updated?

In China, the Employee Handbook is the basic company policy for HR management. It not only sets forth guidelines on employees’ behaviors in workplace but also provides for daily management rules of employees such as work attendance, leave, labor disciplines, etc. The content of an Employee Handbook shall comply with statutory law.

In the past few years, there were several changes of PRC law concerning employee management. Accordingly, companies shall update their Employment Handbook to ensure their compliance with the new legal requirements in daily employee management practice. We summarize these necessary changes to be made in the Employee Handbook below.

Processing employees’ personal information

In practice, companies unavoidably need to process the personal information of employees during the recruitment and employment processes.

According to the PRC Personal Information Protection Law, which became effective on 1 November 2021, when processing the employees’ personal information, companies are obliged to notify the employees of the purpose and method of processing, type of personal information to be processed and the retention period, and the way and procedure for employees to exercise their statutory rights. If any sensitive personal information of the employees such as fingerprints or facial features need to be processed, companies should also notify employees of the necessity of such processing and the impact of such processing on the employees. Also, companies must obtain the consent of employees on processing their personal information, except if such processing is necessary for companies for conclusion or performance of the employment contract, or for carrying out human resource management based on the labor policies of companies – such as the Employee Handbook. Further, companies are obliged to take necessary measures to preserve the information security and prevent employees’ personal information from being accessed without authorization, leaked or lost.

Based on the above, companies may wish to update their Employment Handbook as follows:

• To ensure that companies have the legal right to process employees’ personal information without consent of employees, companies shall check the personal information of employees which are necessary to be processed in their daily work for HR management purposes and incorporate these situations/circumstances of processing such employees’ personal information in their Employee Handbook.
• To protect the employees’ personal information security, companies may wish to, in the Employee Handbook, require the employees having access to other employees’ personal information when performing work duties, not to disclose/process such personal information in breach of law, and to stipulate labor disciplinary actions for violations thereof.

Updating leave policies

According to the PRC Law on Population and Family Planning, which was amended in August 2021, local governments are encouraged to provide longer maternity leave, parental leave, and parent caring leave for employees.

Based on this law, many local governments at the provincial level have subsequently issued detailed regulations on such new leaves. Different locations have issued different leave regulations. For example, according to these applicable local regulations, in addition to 98 days’ national statutory maternity leave, female employees are entitled to enjoy 30, 60, 90, or even more days of additional maternity leave; employees shall be given parental leaves of 5 to 15 days each year until their children reach three years of age. In some locations, under special situations, employees are provided with parent caring leave, if their parents need to be taken care of.

Given such changes, companies are advised to update the leave policies in their Employee Handbook according to the applicable local regulations. However, most local regulations on parental leave and parent caring leave are very general without detailed implementing rules. Thus, to provide clear guidance, companies may consider formulating their own internal policies and procedures on taking such leave in the Employee Handbook.

Preventing sexual harassment in the workplace

According to Article 1010 of the PRC Civil Code, it is prohibited to sexually harass another person against his/her will by words, texts, images, physical behaviors, or any other means. The PRC Law on Protection of Rights and Interests of Women, which was amended and became effective on 1 January 2023, emphasizes prohibition of sexual harassment against women. Further, according to the law, companies must adopt measures to prevent sexual harassment in the workplace such as formulating rules and regulations on prohibiting sexual harassment, setting up hotlines, or other channels for receiving complaints on sexual harassment. Companies failing to take necessary measures in preventing sexual harassment resulting in infringement of women’s rights or bad impacts on society may be ordered by the competent authority to rectify things. If a company refuses to rectify or the circumstances of violation are serious, the person directly in charge and other persons directly responsible may be imposed with punishments according to law.

Based on the above, companies are advised to update their Employee Handbook by including specific provisions on anti-sexual harassment and stipulating labor disciplinary actions for violations thereof, particularly if they have not yet had such policies in the past.

Conclusion

In practice, companies need an Employee Handbook for handling employee matters. Therefore, it is of critical and practical importance that companies have a complete and compliant Employee Handbook at hand. The above-mentioned legal changes in recent years raised new requirements in substance on companies concerning HR management issues. If companies have not updated these policies and corresponding labor disciplinary actions in their Employee Handbook, in case of any breach by employees, companies might not be able to make punishment on the employees with labor disciplinary actions. Therefore, companies are advised to revisit and update their Employee Handbooks to accommodate or reflect the legal changes if they have not yet done so.

Jeanette Yu is Partner and Head of Employment & Pensions and Sophy Wang is a Senior Associate at CMS Hasche Sigle Shanghai Representative Office in Shanghai.