Labor dispatch (劳务派遣) and business outsourcing (业务外包) are two common flexible staffing models in China, but they differ entirely in legal relationship, compliance, and tax treatment. Confusing them creates significant employment-compliance risk.
Core Difference: Legal Relationship
- Labor Dispatch: the dispatch agency forms the labor relationship with the worker; the host company directs and manages them. Governed by Chapter V of China's Labor Contract Law and requires a dispatch operating license.
- Business Outsourcing: the outsourcer takes on a defined service and organizes its own people; the client buys deliverables, not labor. This is a civil/commercial contracting relationship.
Compliance Comparison
| Item | Dispatch | Outsourcing |
|---|---|---|
| License | Dispatch permit required | Business license sufficient |
| Role Limits | Temporary / auxiliary / substitute only, ≤ 10% | None |
| Management | Host company | Outsourcer |
| Invoicing | Dispatch invoice (margin VAT) | Service / outsourcing invoice |
Common Risks
- "Outsourcing in name, dispatch in fact": triggers joint liability if reclassified;
- Exceeding dispatch role ratios;
- Pay parity violations: dispatch workers in identical roles must receive equal pay.
Selecting the Right Model
- Core business needing direct management → direct hiring or dispatch;
- Non-core, deliverable-based (support, IT ops, cleaning) → outsourcing;
- Short-term projects or peak demand → dispatch;
- Cross-region or cross-border → outsourcing / EOR.
Conclusion
Compliance staffing is the foundation of sustainable operations. CRBPO holds a labor dispatch license and provides outsourcing & dispatch across 30+ cities in China.