Womble Carlyle Presents China's Labor Contract Law and a Changing Economic Environment

On Thursday, June 25, Womble Carlyle's China Team and the China Research Center will host guests and clients in Womble Carlyle's Atlanta office for a presentation on "China's Labor Contract Law and a Changing Economic Environment". The discussion will focus on the mplementation and implications of China’s new labor contract law and an update on the effect of the global crisis on China's economy.

Registration and networking will begin at 11:30 am. The program and lunch will last from 12:00 noon until 1:30 pm.

Interested guests may RSVP via email. There is no charge to attend this event, but seating is limited. We kindly request all RSVPs by June 22.

Event Details:
Thursday, June 25, 2009
11:30 am - 12:00 pm - Registration and Networking
12:00 pm - 1:00 pm - Lunch and Presentation
1:00 pm - 1:30 pm - Q&A and Networking

Womble Carlyle Sandridge & Rice, PLLC
Atlantic Station
271 17th Street, NW, Suite 2400
Atlanta, GA 30363-1017
(404) 872-7000

For directions, click here.

Can Companies in China Reduce Employee Salaries?

The new Chinese Labor Contract Law ("LCL") has been in effect for a year. Companies, legal professionals and enforcement agencies in China are still trying to understand how to implement the specific provisions of the law. One of the issues that Chinese companies face in the current economic down-turn is whether employers can reduce employees' salaries in order to avoid laying off employees.

This may seem to be a puzzling question to those who are not familiar with doing business in Chna. After all, salary freezes and salary reduction seem to be the topic of the day in the U.S. Almost all companies seem to be doing it in an effort to reduce cost to better position themselves to weather the current economic crisis. Nobody is asking (or has any reason to ask) whether they can legally do that. As long as wages meet the applicable federal and state minimum wage requirements, how companies pay their employees is entirely a private matter between the employer and the employee.

In China, however, this is a legitimate and even prudent question to ask. One of the purposes of the LCL is to protect employees from abusive labor practices, including withholding wages and terminating employees at will. Among other things, the LCL requires employers to enter into employment contracts with each employee, setting forth the employee's pay, working conditions and other rights and obligations. Employers that violate the LCL will face fines and other penalties. The LCL has specific provisions governing how and under what circumstances an employee may be terminated. The LCL, however, does not provide whether an employee's salary, once set, can be reduced, or if so, how.

This article (http://www.china-briefing.com/news/2009/01/23/reducing-salaries-for-china-employees.html) argues that since the main purpose of the LCL is to stablize the labor market, if an employer has to choose between lowering wages and laying off employees, the employer can reduce wages. It suggests that the employer should obtain the approval of the labor union and the local labor administrative agency.

Barack Obama's Chinese Tie

Regardless of what one's ideology inclination is, one has to admit that today is a historical day in he U.S. Any doubt of that should be washed away by the hundreds of thousands of people who started gathering at the National Mall in Washington DC at the crack of dawn this morning, battling the bitter cold weather, to be part of the presidential inauguration of Barach Obama.

Most people know about Obama's Kenyan tie, and many know that he lived in Indonesia for a few years when he was a young boy. But not many know that he also has close family tie to China. The English language Chinese newspaper China Daily reported yesterday that Obama's half brother Mark Ndesandjo has lived in Shenzhen for the last seven years, is married to a Chinese woman, speaks Mandarin, and practices Chinese calligraphy. Enjoy the full story at this link, http://www.cdeclips.com/en/nation/fullstory.html?id=14186.

Postcard from the Olympic Games

Hello again. It's been several days since I last talked to you. We've been busy going to various events.

We went to the tennis event on the 11th and watched Nadal Rafael defeat an Italian player and S. Williams defeat a Russian player. The Williams' match was a continuation of the match started the day before but was suspended due to rain. We had first row seats and had a great view of the games. Unfortunately, we couldn't stay to watch Federer. We had tickets to the women's basketball game that afternoon. The basketball stadium is beautiful, inside and outside. Our seats are way at the top but we still had a clear view of the game. The game was between Latvia and Bellarus. It was a great game. In addition to the professional cheerleaders performing during half time and timeouts, there was a group of Chinese cheerleaders in the audience cheering for both teams throughout the game.

We had a lot of difficulty getting to the Tennis Center and from the Tennis Center to the Basketball Stadium. The volunteers couldn't tell us exactly how to get to the Tennis Center and sent us going from place to place looking for the right bus to take. A taxi driver told us taxis weren't allowed to go to the Olympic venues (which turned out to be only half true- they can get to a certain point but not all the way to the gate) and refused to take us. After we finally got on the right bus (an Olympic bus route), we couldn't figure out which stop to get off because they only announced the names of the stops without telling you what venues were nearby. We ended up getting off one or two stops too early and had to walk the rest of the way. After tennis, we couldn't find a direct shuttle going from the Tennis Center to the Basketball Stadium (there wasn't any) which is half way across town. We had to go back into public transit to get to the Basketball Stadium. Luckily, we found a taxi driver who would take us.

The last event we watched was the men's cycling time trial on the 13th. My son Oliver is very into cycling lately and idolizes Fabian Cancellara of Switzerland. This was a road race that doesn't require any tickets, and none were sold. So we decided to go to the finish line at the foot of the Great Wall and watch the final moments of the race and the award ceremony. We couldn't find a bus going that way. Since Oliver was so anxious to watch the race, we decided to take a cab for the 50 or so kilometer ride there. When we got to the point which is about five kilometers to the destination, we came upon the first security road block. We were told that vehicles without BOCOG permit would not be allowed to pass that point. Seeing how disappointed Oliver was, my husband started talking to the guard. After 10 minutes or so, the guard decided to let us through. We came upon another road block at the three kilometer point. This time we weren't able to convince the guard to let us pass. Fortunately, there was a taxi there that had a BOCOG permit. We shared the cab with a local sports reporter who was also trying to get to the finish line. But, we couldn't get to the finish line. We were told no spectators, other than BOCOG employees and volunteers, were allowed at the finish line unless you had gotten there early in the morning before security was put in place. But we were able to get to the 500 meter point and watched the final dash from there. To Oliver's great satisfaction, Cancellara won gold!

Besides watching the games, we hosted two dinners at my in-laws' home to give our American friends an opportunity to visit a home in Beijing and to experience some real Chinese home life. Sam Williams, President of Metro Atlanta Chamber of Commerce, was our first guest. My mother-in-law served one of my favorite traditional Beijing dishes called Chun Bing (Spring Wraps). We had a great time with Sam, sharing stories of attending the Beijing Olympics, watching and playing with fireworks and many more activities.

11 Alive's (Atlanta TV) Brenda Wood and her cameraman David Brook came to our home on the 12th. They talked to us about many things, including our paths from Beijing to Atlanta, cultural differences, and living as both a Chinese and an American. We invited them to join us for dinner after the interview. This time, my mother-in-law served the most typical and homey Beijing food of all, jiao-zi with many cold dishes. It wasn't elaborate but very traditional Beijing. We had a great conversation and had fun teaching Brenda how to use chopsticks. It's a lot easier to talk to reporters when you are not being interviewed.

Our visit in Beijing is coming to an end. This has truly been a lifetime experience from many perspectives. Oliver's interest in and appreciation of what he saw and experienced in China is a great satisfaction to us. He was in awe of the garden house, the Buddhist temple and the West Lake in Hangzhou, amazed by the development in Shanghai. He had a lot of fun cheering for both the Chinese and the U.S. at the Beijing Olympics. As Chinese, attending the Olympic Games in Beijing has been an unparalleled experience. Besides the excitement of watching world class competitions and seeing the world come together for the joy of sports, there is an added element of national pride.

Friends, thanks for visiting our blog. See you back home!

Swimming in Beijing

We ended up going to the swimming event on the 10th. Even though it was an event of qualifying contests, it was an incredible experience. Five or six Olympic records were broken, and the U.S. men's 4x100 meter breast stroke relay broke the World Record!

The area called the Olympic Greens where there are several Olympic venues is very nice. Many large sponsors, including Atlanta's Coca Cola, have set up hospitality centers there. There are a few souvenir stands. Besides checking out the souvenir shops and taking pictures, there aren't any activities there. The swimming event was held in the Aquatic Center, also known as the Water Cube. It's an incredible building. The outer walls are literally made of plastic sheets that look like bubble wraps. There are decorative ponds outside the building with water falls running into the ponds. The interior is quite beautiful as well. Half of the hall is a standard size Olympic pool, and the other half houses a diving pool with various diving boards and platforms.

Michael Phelps received warm applause when he walked in. Yes, he's well known in China as well. It started raining right before the event start time. It's a good thing it's an indoor event. By the time we left the stadium, it was raining cats and dogs. I wondered what happened to the rain cloud chasing plan that we've heard about.

Opening Ceremonies at the Olympic Games

The opening ceremony was absolutely spectacular!

That the performance unfolded on an open scroll of a picture is a brilliant idea. The entire show displayed the richness of China's culture and was filled with beautiful colors and texture. There wasn't any blood pumping central piece of music. But overall, the music was beautiful. The torch is absolutely beautiful. Its form resembles the end of an unfolding scroll (another brilliant idea), with red and "lucky cloud" decoration.

The weather on the first day of the Games was not bad at all. We actually saw the blue sky and white clouds in the afternoon. It was so sunny that I wore my sun glasses most of the day. The air was still a little smoggy though. It looked like there was a thin veil hanging in the air all the time. We didn't have any tickets for the day. So, we decided to go to the Bird's Nest just to hang out. Unfortunately, we found out pretty quickly that without tickets to any of the events being held there, we were not allowed to even go near the Stadium. The closest we could get was several blocks away, across a couple of highways. There were a lot of people there, Chinese and non-Chinese, all trying to get a close look of the Bird's Nest and the flame and taking pictures. We were very disappointed. I wish they had set up some activities for the general public who are unable to get tickets to the Games but want to participate in some form. With everything I've seen and heard so far, it seems to me that the only thing the Beijing Olympic Organization focuses on is to make sure the Games go smoothly. Creating a positive, enjoyable and memorable experience for the local people and visitors around the world doesn't seem to be part of their plan or concern.

Nonetheless, we are still having a good time. Just being here is exciting, and we've got a ton of souvenirs.