Sean Cooney


This Article examines the capacity of Chinese labor laws and labor institutions to combat abuses. It finds that the Chinese regulatory framework pertaining to work relationships is impeded by a failure to clarify key norms, a bureaucratic “command and control” approach to inspection and dispute resolution, and a narrow and ineffective range of tools for inducing compliance. The Article, however, also finds evidence of emerging regulatory innovation and sophistication that may lead to a much more effective legal response. The legal material relevant to China's labor abuses is vast and highly complex, so it is necessary to choose specific abuses to render the analysis manageable. This Article focuses on underpayment of wages for work performed for three reasons. First, underpayment of wages is among the most common labor abuses, affecting many millions of workers. Second, systematic underpayment of contracted wages is a practice that is generally acknowledged, within and outside China, to be unjustifiable. Third, underpayment of wages is apparently a violation of Chinese law, and thus raises the central question of this Article: What is it about Chinese labor law norms and institutions that inhibit better compliance with the law? Part I of the Article briefly describes the extent of the wage underpayment problem in China. Part II concentrates on the internal structure of the legal rules and the legal institutions that regulate work, especially with respect to remuneration. It analyzes the nature of the relevant legal rules, the enforcement work of the bureaucracy, the principal labor dispute resolution institutions, and the functions of the official trade union organization (which is treated as a quasi-regulatory agency). Part II concludes by discussing a new draft national law and a promising regional initiative. Part III sketches out several reform proposals. Drawing on successful international examples of regulatory innovation, as well as the recent creative Chinese experiments in labor enforcement, Part III proposes regulatory initiatives that have realistic prospects of inducing greater adherence to the law in China's current political and economic context. Of course, no legal reforms will definitively close the gap between the letter of labor law and workplace practice. Deficient implementation of, and compliance with, labor law (and law in general) is universal. Even in developed countries, labor regulation frequently fails to induce change in workplaces or provokes unintended outcomes. This is unsurprising; work relations are characterized by disparate social systems (or frames of reference). Workplace participants determine their actions not just with a view to legal validity, but also, or even more so, on the basis of such matters as cost-benefit calculations, concordance with organizational decision-making and politics, consistency with local “custom and practice,” and perspectives about appropriate gender roles. In light of this complexity, attempts to invoke law to achieve a change in work relations practices may be ineffective, counterproductive, and incoherent. Nonetheless, there is now a rich literature that identifies which forms of legal interventions are more likely to achieve positive outcomes in a given context. That literature informs this discussion of reform in China. Regulatory scholars have suggested that, in many circumstances, “responsive,” “reflexive,” or “decentered” forms of regulation have proved to be superior alternatives to traditional “command and control” style rule-making, with its emphasis on State-based standard setting, coupled with the imposition of sanctions. Chinese labor law heavily emphasizes “command and control,” so there is certainly a need to consider alternative approaches. The analysis in this Article is important for at least two reasons. First, China is frequently criticized for its labor abuses, yet this criticism is frequently unaccompanied by specific reform proposals that are feasible in the Chinese context. This Article assists those who want to see improvements in Chinese labor law to develop such proposals. Second, by pointing to the possibilities of regulatory innovation in the context of one problem (wage arrears), the author hopes to contribute to debates about how Chinese law can respond more effectively to other kinds of labor, social, and environmental problems.