Insulted and Damaged: The Past and Present of Dispatched and Outsourced Workers

 Editor’s note: Recently, an article titled “The “Humble” Infected Female Workers at Nanjing Lukou Airport” was posted on the Moments. The article pointed out that the source of the spread of the epidemic was a group of female cleaners working at Lukou Airport. They were employed by a labor company to work at the airport as outsourcers. Because the labor service company and the airport shied away from each other's responsibilities for training them and distributing anti-epidemic materials, they eventually contracted the new coronavirus. The virus then spread across the country with the flow of people and logistics at the airport. This brought the labor dispatch and outsourcing system to the forefront, and made people realize that the negative impact of these systems on society is far more than just harming the rights and interests of workers.

Taking this as an opportunity, most of the agency specially invited Lin Shaomao, who has long been concerned about the situation of domestic dispatched workers and outsourced workers, to sort out the history and current situation of their development in China, and systematically analyze the impact of these systems on all parties. Because the amount of information in the article is very rich, we will push it twice. This article mainly describes the development of dispatched workers and outsourced workers in China before and after the reform and opening up.

Text｜Lin Shaomao

Let's take a break from the job at hand and think about how everyday life is tied to dispatch and outsourced workers. When I open my eyes, it is often because of them that we have a mobile phone that wakes us up every morning, we can take a taxi to work, and we can enjoy delicious food without leaving home... They are also the cleaners who clean the city, we are When calling 10086, the operator is the teller when we go to the bank to do business, the clerk when we go to the government department, the gas station employee, the security guard at the gate of the community, the uncle and aunt in the canteen...

Dispatched laborers refer to workers who have a legal labor relationship with labor dispatch agencies and are dispatched to other workplaces for labor. Outsourced workers are closely related to dispatched workers. Legally, both types of workers have labor relations with labor service companies and no labor relations with employers. However, national-level laws and government regulations currently do not define the difference between the two types of workers. In practice and some local government regulations, those who are mainly managed by employers are considered dispatch workers , while those who are mainly managed by labor service companies are considered outsourced workers . In reality, "outsourced workers" with no real management in the name of outsourcing are very common. This situation is called "true dispatch, fake outsourcing". These two types of workers are the main types of workers in each unit other than regular workers , so they deserve special attention. They repeat low-paying jobs for a long time, they can be fired at any time, they are trapped in the system, they are brought to the forefront when something goes wrong... They are the backbone of our society and the scars of our society.

1. Origin

The contract labor system has a long history in my country. The large-scale appearance of wage workers in my country was after the mid-Ming Dynasty, especially in the Yangtze River Delta region where the commodity economy was developed. At that time, according to the employment time limit, there were already long-term and short-term workers among the employees. Long-term workers are employed for at least one year, while short- term workers are employed for less than one year, including daily, monthly, and quarterly workers. In addition to direct employment, the prototype of the current popular outsourcing system —the package-to-buy system —has emerged. For example, in the Songjiang Shu Socks Industry in the Wanli period of the Ming Dynasty, the merchants of the sock store did not engage in production themselves, but contracted the production to the surrounding farmers, and then purchased their products, and each family became the small workshop of the owner of the sock store.

The Opium War of 1840 opened the door to China and gave birth to modern industries and services with new technologies and new management methods. Since the second half of the 19th century, the in- package system has been quite popular in China. The characteristic of this system is that the factory owners do not directly hire and manage workers, but do these jobs through subcontractors. Specifically, the factory owner provides workshops, production equipment, and sometimes raw materials and working capital; the foreman is responsible for recruiting and managing workers to complete production with high quality and quantity . This process may involve layers of subcontracting; finally, the factory owner obtains the products, And pay the foreman his personal salary and contract fee; part of the contract fee will be paid to the workers, and the rest is the commission of the foreman.

Under this system, factory owners directly hired highly skilled and managerial personnel (mainly contractors), who were called inside workers ; workers hired by contractors were called outside workers . As far as the employment period is concerned, the internal workers are basically long-term workers, and the external workers may be long-term workers and short-term workers. The popularity of the insourcing system continued into the Republic of China. For example, in Shanghai at that time, almost all work in the dock industry, rickshaw industry, and construction industry used this form of organization; in railway transportation and manufacturing, some processes used this form. Contractors profited quite a lot from this system. In the dock industry, rickshaw industry and shipbuilding industry in Shanghai during the Republic of China, the commission received by the contractor often accounted for more than half of the contractor fee .

2. Undercurrent

During the planned economy period, the internal and external labor system was continued, and the prototype of labor dispatch also appeared. During this period, my country's urban employment population was dominated by fixed workers, of which Chinese enterprises generally accounted for more than 60%, and collective enterprises also had a large number of fixed workers. At the same time, the undercurrent of temporary workers is surging: even in state-owned enterprises, the proportion of temporary workers is maintained at 10-15% all year round, and even higher than 20% in some years.

Temporary workers are discriminated against in many ways compared to permanent workers. Unemployment was the biggest nightmare for workers at the time. In terms of employment stability , there is no labor contract between fixed workers and employers. Except for extreme cases such as the failure of the Great Leap Forward, they enjoy lifetime employment; while temporary workers do temporary, seasonal, or long-term work, when they When not needed, when they are sick, injured, pregnant, or when they misbehave, the fate that awaits them is dismissal. It happens that casual workers commit suicide because they are fired.

In terms of working environment safety , temporary workers are concentrated in low-skilled positions. Compared with regular workers, they are more likely to be assigned to dirty, tiring and dangerous positions, but they often do not have enough safety production training and labor protection supplies. As a result, Yes, they have higher rates of work-related injuries and work-related fatalities.

In terms of income , fixed workers mainly get monthly income, and stopping work for a day or two has little impact on income; with the improvement of seniority and position, they can expect wages to climb along the eight-level wage system. Temporary workers, by contrast, are paid piece-rate or daily wages: once they stop working, they have no income, which limits their participation in collective action; and, regardless of how long they collectively work, their wages tend to stay at the eighth grade. lowest level. The pay gap between permanent and casual workers is so large that some permanent workers hire temporary workers to work for them and then earn the wage difference for nothing.

In terms of labor insurance and welfare , temporary workers are significantly worse off than fixed workers in terms of illness, work-related injury, work-related death, and maternity; fixed workers can receive a monthly pension equivalent to 50-70% of their original wages after retirement, while Temporary workers get nothing. As for small benefits such as rice, flour, grain, oil, soap, and towels, temporary workers are often overlooked.

In terms of political treatment , it is almost the prerogative of permanent workers to join trade unions, party organizations, and enterprise workers' congresses and other official institutions for participating in and deliberation of state affairs, and temporary workers are excluded. Finally, in terms of personal dignity , temporary workers are often looked down upon by regular workers and by many people in society, so that they cannot participate in some public activities and buy some scarce items. Temporary worker status is a big rock in their hearts, and some people are even ashamed to tell their date their temporary worker status for fear of being rejected by them.

In addition to these commonalities, there are also huge differences within temporary workers, one of which is their employment arrangements . During the planned economy period, no labor contracts were signed between fixed workers and units. Initially, temporary workers did not sign labor contracts. In 1957, under the background of controlling the urban population, the whole country began to implement the labor contract system among temporary workers , and temporary workers were also called contract workers. These fixed-term labor contracts facilitate the dismissal of temporary workers by employers. In the same year, the Beijing municipal government required urban labor units to sign tripartite contracts with migrant workers and their affiliated agricultural production cooperatives. In addition to stipulating basic labor conditions such as employment period and wages, the contract also stipulates the share of wages paid by the employing unit between migrant workers and their affiliated cooperatives; And after being dismissed from work due to illness or injury, migrant workers can also participate in the cooperative's dividends. The State Council then asked that the experience be rolled out across the country. Obviously, under this arrangement, the agricultural cooperative plays a role similar to the current labor dispatch agency . During the Great Leap Forward, this type of workers acquired a new name: Workers and Farmers. In Shanghai, the conventional sharing ratio is: migrant workers only get 40% of their own wages, and cooperatives get 60%, so both workers and farmers are also called "four or six workers" in Shanghai. Across the country, it is common for cooperatives to take 60 to 70 percent.

During the Great Leap Forward, the state's labor policy gradually shifted from advocating fixed workers to both fixed and temporary workers, and even advocating temporary workers, which aggravated the expansion of temporary workers. However, the number and total wages of temporary workers in a single unit have long been controlled by the state. In order to circumvent this control, often with the acquiescence or even encouragement of local governments, units turn to outsourced workers whose numbers and total wages are beyond the control of the state . This situation is similar to the fact that after 2014, the state strengthened regulations on dispatched workers, and as a result, employers turned to outsourced workers. There are many organizational bodies of the contracted labor team. In cities, labor departments and sub-district governments often organize unemployed persons and housewives to provide services for other units; functional departments of local governments, such as transportation bureaus and handicraft bureaus, also organize employees and family workers of their own units to provide some services. Professional services; in Shanghai, as long as collective enterprises are willing to undertake foreign business, they are also qualified to do contract work. In rural areas, it is the people's communes and production teams that organize labor contracting teams. Typically, the organizers of the contract teams take 10-25% of the wages of the contract workers as commissions .

According to whether the contract workers work together with regular workers, they are further divided into "outsourced work" and "outsourced work" . According to the archives, in 1967, there were about 75,000 outsourced workers organized by the Shanghai municipality in the name of labor service teams, of which 59,000 were outsourced and 16,000 were outsourced. In 1964, the Shanghai Municipal Labor Bureau required that outsourced work should be managed by the foreman, not the employer. This kind of regulation implies the universality of outsourcing work being managed by the employing unit at that time, and has the same effect as the popular "fake outsourcing, real dispatch". The outsourced internal work managed by the foreman obviously continued the in-contracting system that was popular in the late Qing Dynasty, while the outsourced work managed by the foreman was a typical worker under the outsourcing system.

The differences within the temporary workers have led to the differentiation of their treatment . According to household registration, the conditions of temporary workers with urban household registration are better than those with rural household registration. Temporary workers with rural household registration often do not enjoy any labor insurance benefits, and there is no hope of becoming a regular, while temporary workers with urban household registration (except outsourced workers) can do both. Among the temporary workers with urban household registration, according to the employment arrangement, regular temporary workers (directly employed by the employer) are at the top of the temporary worker pyramid. Their labor insurance benefits were in accordance with the labor insurance regulations at the time, and they often had the opportunity to become regulars; most of these workers were male. The boundaries between other temporary workers and outsourced workers are often unclear, and there is a large gap in labor insurance and welfare benefits. Among them, the workers who are arranged by the street where the factory is located and the family members of the factory's own employees often enjoy a certain amount of free medical treatment. The workers do not have any medical treatment, and there is no chance of regularization. Outsourced workers are paid less than regular casual workers, often cannot afford a doctor if they get sick, and sickness makes them more likely to be fired. Therefore, once sick, outsourced workers often fall into a desperate situation of poverty and illness. The situation of female outsourcers is particularly tragic, so much so that there are accounts of female outsourcers who are afraid of being fired after pregnancy, tighten their stomachs, and finally give birth to dead babies. In daily life, the entire group of temporary workers is looked down upon by regular workers, and outsourced workers are looked down upon by other temporary workers. The difference between outsourcers and other temporary workers has led to the conversion from outsourcers to regular temporary workers to be considered an incentive or relief. This situation generally occurs when the outsourcer is frequently needed, or when the outsourcer suffers a work-related injury or an occupational disease. These circumstances led to the fact that outsourced labor was an important force in the temporary labor movement of 1966-1967.

3. Surge

① State-owned enterprise reform → dispatch and outsourcing

Since the reform and opening up, the original urban employment system with fixed workers as the main body has been abolished, and the employment system with labor contracts as the main body has been implemented nationwide. Going hand in hand with this transition is the undercurrent of dispatch workers and outsourcers from the planning years, galloping into a frenzy . In the late 1970s and early 1980s, with the general increase in population and a large number of educated youth returning to the city, the pressure of urban employment was enormous. To this end, the central government encourages local governments to establish labor service companies. This type of company is actually a more formal form of the previous labor service team. For a time, local labor bureaus, personnel bureaus, trade unions, streets and state-owned enterprises responded. In 1987, there were 56,000 labor service companies nationwide, employing 7.3 million workers and managing 1.7 million temporary workers. The service targets of labor service companies are the unemployed and semi-unemployed and the redundant workers in the reform of state-owned enterprises. The company provides them with training and job introductions, or dispatches them to labor units, or forms them into service teams to undertake work.

Dispatched workers and outsourced workers in the new era were initially the companions of the reform of state-owned enterprises . Once a worker is determined to be redundant, on the one hand, the worker remains unchanged with the state-owned enterprise in terms of labor relations; Through dispatch and outsourcing, the original unit not only reduces redundant staff, but also receives commissions from outside units. In the 1990s, as the reform of state-owned enterprises entered the deep-water area, more and more laid-off workers were employed. The government required state-owned enterprises to set up reemployment centers. These centers, in addition to providing living allowances and paying labor insurance to the laid-off workers, had the same functions as in the 1980s. The labor service company is no different. These centers were closed one after another in the early 2000s. At the same time, in order to help laid-off workers re-employment, governments at all levels from the central to local governments have vigorously encouraged the development of labor dispatch companies , and have introduced measures such as financial subsidies and tax relief. For example, the "Interim Measures for the Administration of Labor Dispatch Organizations in Beijing" issued in 1999 stipulates that if the newly established labor dispatch organization recruits more than 30 laid-off workers, and signs labor contracts with them for more than 2 years and the probation period expires, they can enjoy the city labor and A one-time subsidy of 50,000 to 200,000 yuan given by the social security department and the financial department at the same level... If the labor dispatch organization recruits laid-off workers, more than 50% of the total number of employees, and the labor relationship has been maintained for more than 3 years (inclusive), They can enjoy the preferential policy of equal amount of business tax subsidy within 3 years from the date when the number of resettled people reaches the specified proportion. In 2003, then-President Hu Jintao pointed out in a speech: "We must actively develop labor dispatch and other types of employment service organizations, guide scattered individual laid-off workers to organize, and provide organizational support and assistance for them to achieve reemployment. "

The control over the total wages of state-owned enterprises is also the reason why they use dispatched and outsourced workers in large numbers. In order to improve the efficiency of state-owned enterprises, since 1985, the total wages of state-owned enterprises have been linked to their economic benefits. According to the accounting standards for state-owned enterprises formulated by the SASAC, only the wages of regular workers are included in the total wages, and the wages of temporary workers are included in operating expenses, which are outside the control of the SASAC. Moreover, the income of regular workers in state-owned enterprises is higher than the social average all the year round, while the wages of temporary workers are much lower. As a result, the large number of dispatched and outsourced workers can not only help state-owned enterprises reduce labor costs and improve economic benefits, but also help state-owned enterprises expand their total wages and consolidate their vested interests.

② Opening to the outside world, urban-rural migration → dispatch and outsourcing

The entry of foreign capital into China has also boosted the development of labor dispatch. For the foreign representative offices and foreign companies that entered China in the early stage, they knew little about China and it was inconvenient to recruit workers. At the same time, the government intends to regulate these foreign establishments by controlling employment. The earliest professional dispatch agency in my country—the Beijing Foreign Enterprise Human Resource Service Company (FESCO) established in 1979—was born under this background. Such foreign-funded human service companies are still the leader in China's labor dispatch market. Since then, although foreign-funded institutions have the right to recruit workers, the practice of using dispatch workers has been maintained for a long time. Another reason why foreign-funded companies use dispatch workers is that some multinational corporate headquarters have controls on the number of employees in their Chinese branches. Using dispatch workers can bypass this control and increase staff.

In the early 1980s, the urban labor market was liberalized to the countryside. The wave of urban-rural migration also promotes the development of labor dispatch. Although the vast majority of migrant workers migrated to work in cities spontaneously or with the help of their relatives and friends, some migrant workers received help from local labor agencies during the migration process . The main body of these institutions is the county and township governments and their affiliates. The local government will also assist farmers to form construction contracting teams or nanny teams to contract external services. Such practices still exist today, especially in some remote and backward areas. In the poverty alleviation campaign that ended last year, it is an important practice for local governments to organize the export of labor force to help the masses get rid of poverty. In the recent hit drama "Shan Hai Qing", Bai Maimiao's experience of working in Fujian is a screen presentation of this practice.

③ Labor-intensive industries → dispatch

The development of labor-intensive enterprises has also promoted the surge of labor dispatch. For example, in Dongguan in the 1980s, in order to meet the needs of the booming export processing industry, the local government not only established labor intermediaries to transport manpower to enterprises, but also encouraged the development of private intermediaries. At the same time, Wenzhou also saw the rise of private intermediaries, providing manpower for thriving private enterprises. These intermediaries first made money by collecting money from job seekers. With the advent of the labor shortage era, they turned to the labor companies for profit, and the main form was labor dispatch. In the era of labor shortages, the era when factories posted job recruitment notices at the door to attract job seekers like Jiang Zhiqing are gone forever. With the shortage of labor and the short-term labor of the new generation of migrant workers, it has become too expensive for factories to recruit people on their own, so they have to resort to labor agencies.

In addition, after the global financial crisis in 2008, the global economy weakened and Chinese exports were affected. For factory operators, there used to be not only enough workers, but also enough orders; now, not only are workers hard to recruit, but orders are also hard to find. This situation means that orders become more volatile. To control costs, companies must synchronize labor fluctuations . This situation is currently the norm for export-oriented factories in China.

There are two main roles of labor intermediaries. One is to help factories recruit enough workers and legally dismiss unneeded workers , especially when the order volume fluctuates sharply and companies must increase or reduce manpower in a short period of time; The need for legal dismissal has become especially urgent after the implementation of the Labor Contract Law; another is to help factories reduce worker turnover. Labor intermediaries can achieve the first role mainly because the cooperative relationship between them often forms a layer-by-layer subcontracting intermediary chain or even a network, which allows their tentacles to extend to many places and come into contact with many workers. . Since labor intermediaries have mastered the supply of labor, they are not willing to only earn a one-time recruitment fee, but tend to charge a head fee based on the working hours of the provided labor, such as 100 yuan per person per month. At this time, the labor intermediary has become a labor dispatch company. In reality, the boundaries between the two are not clear, so this article uses a mixture of the two terms. The second role of labor intermediaries is an extension of the first role. For factories, the high turnover rate of recruited workers is a big problem. This is why factories are willing to accept monthly payments to labor brokers. This monthly payment will reduce worker turnover into a labor intermediary problem. Labor intermediaries often stabilize workers by dispatching factory managers to provide services to workers and mediate conflicts between workers and factories.

④ "Labor Contract Law" → Dispatch

On January 1, 2008, the Labor Contract Law came into effect. The Act greatly strengthens the legal protection of regular workers. The most important clauses of the law include: (1) Clauses for the conclusion of labor contracts: If the employer fails to conclude a written labor contract with the worker for more than one month but less than one year from the date of employment, it shall pay the worker twice the monthly wages. ; If no contract has been signed for more than one year, the employer and the worker shall be deemed to have concluded a labor contract with no fixed term. (2) Non-fixed-term contract terms: If the employer has continuously employed workers for more than 10 years, or has concluded a contract with the worker for the third time in a row, it shall sign a non-fixed-term labor contract. (3) Compensation clause for illegal dismissal: It is not the worker's fault, and the employer terminates the contract before the contract expires, and should pay double the economic compensation to the worker. These clauses increase the risk of employers not signing labor contracts with employees. And once the labor contract is signed, the employer loses the freedom to fire the employee because compensation must be considered . In addition, the "Social Insurance Law" that came into effect on July 1, 2011 and the "Housing Provident Fund Management Regulations" revised in 2002 stipulate the obligations of employers in terms of "five social insurances and one housing fund". The five insurances and one housing fund often account for about 40% of an individual's pre-tax salary, which is a huge expenditure that employers want to escape.

To evade these obligations, companies make extensive use of dispatch workers. Dispatched workers sign labor contracts with labor dispatch agencies and then send them to the company to work. In this way, the labor dispatch agency has become an employer and is the first bearer of the above-mentioned obligations, and the enterprise is only an employer. By using dispatch workers, employers can not only come on call for employees, but also be able to leave work at any time. Indefinite term clauses and wrongful termination indemnity clauses do not pose a problem with sending agencies. When employees are returned to the dispatch agency, it is simple for the dispatch agency to get rid of them: just send them to a job they don’t want to go to, and they can be forced to leave automatically, thus achieving a zero-cost termination result. As for the five insurances and one housing fund, my country's current law enforcement is not strong, and there are still cases of non-payment, omission of payment, and non-payment according to the actual wage base for regular workers, not to mention dispatch workers. The practice of many companies is to pay five insurances and one housing fund to a small number of employees for inspection.

Under the combined effect of these factors, dispatch workers have expanded considerably. There is no consensus on the number of dispatched workers in my country. Among them, the most authoritative estimate is the National Federation of Trade Unions: in 2011, there were about 42 million dispatch workers in China, of which 37 million were in enterprises (13.1% of the total number of employees in enterprises) , and 5 million in state organs and institutions; among them, 16.2% of Chinese enterprises Employees are dispatch workers. In some central enterprises such as telecommunications, postal services, and petrochemicals, dispatch workers account for more than 60%; 14% of employees in Hong Kong, Macao, Taiwan and foreign-invested enterprises are dispatch workers; 1,805 companies were surveyed in Shanghai in 2011. Among the more than 400,000 employees of the enterprise, labor dispatch workers accounted for 25%, an increase of 36.1% over 2007.

⑤ From dispatch to "outsourcing"

Faced with the abuse of dispatched workers, the state has tried to restrict it through legislation , and the employers responded by using a large number of outsourced workers. In fact, the "Labor Contract Law" has a section on labor dispatch at the beginning, which stipulates the respective obligations of labor dispatch units and employers, but obviously these regulations have not stopped the flood of dispatch workers. On July 1, 2013, the amendments to the Labor Contract Law came into effect. This amendment improves the access conditions for the labor dispatch business, further clarifies the standard of equal pay for dispatch workers and regular workers in the employing unit, and strengthens the restrictions on the use of dispatch workers.

The strictest regulation comes from the "Interim Regulations on Labor Dispatch" that came into effect on March 1, 2014. This regulation only restricts enterprises, not state organs and institutions. It requires companies to reduce the proportion of dispatch workers to less than 10% of their total workforce by March 1, 2016. The original intention of this regulation is to force companies to convert dispatch workers to regular positions. However, companies are reluctant to do so, and instead change a large number of dispatched workers to "outsourced workers" in order to achieve the purpose of reducing the ratio . In order to complete this transformation, the enterprise only needs to sign an outsourcing contract with the labor dispatch agency, and the labor dispatch agency pays taxes on the basis of the contracting fee (including the service fee of the dispatch agency and the wages of the dispatched workers); before this, the labor dispatch agency Taxed on a service fee basis. In this process, the intermediary agencies that provide third-party services often remain unchanged, and the workers are still managed by the employers, and the only changes are paperwork and tax payment. Therefore, this practice is called "true dispatch, false outsourcing". It is the main means for enterprises to reduce the proportion of dispatched workers. In fact, the threshold for outsourcing business is much higher than that for dispatching. Except for some services such as security and cleaning, employers have difficulty finding reliable outsourcing agencies in the market, and on the other hand, they are unwilling to support an outsourcing company to compete with themselves. The result is bound to be the proliferation of "true dispatch and false outsourcing". It is not that the government did not expect this response from companies. In fact, the consultation draft of the "Interim Provisions on Labor Dispatching" pointed out that if the employer outsources the business to the contractor, but directly manages the labor process of the laborers of the contractor engaged in the business, it belongs to labor dispatch. However, this clause was deleted when the "Interim Provisions on Labor Dispatch" was officially promulgated, so that enterprises can freely abuse "true dispatch and fake outsourcing" to achieve the purpose of lowering the ratio.

After the "Interim Provisions on Labor Dispatching", dispatch workers and outsourced workers continue to proliferate, but no new regulatory measures have been introduced, and the enforcement of old measures is not high. In fact, with the slowdown in economic growth, the question of how labor policies can serve companies to reduce costs and increase efficiency has been brought to the forefront. In order to help enterprises reduce costs, some places such as Guangdong Province have reduced the social insurance payment ratio of enterprises. This approach is consistent with the direction of enterprises escaping social security obligations through labor dispatch. It is conceivable that the implementation of labor dispatch regulations is slack. According to the author's team's survey of labor-intensive enterprises in Guangzhou, Shenzhen, Tianjin, Changsha and other places in 2016, it is common for such enterprises that more than half of the employees are dispatch workers.