The launch of the labor law was noted in an earlier post. An article from the Washington Post gives an update on its impact:

Armed with a landmark new labor contract law that went into effect Jan. 1, employees are turning the tables on employers in China.

The law -designed to combat forced labor, withholding of pay, unwarranted dismissals and other abuses - represents a major victory for Chinese workers who for decades have complained of companies that would stop at nothing to wring out profits. It has prompted legions of workers in recent months to become bolder about quitting and about staging strikes to demand improvements in work conditions and wages.

For companies already struggling with inflation, high energy costs, the falling dollar and an environmental crackdown, however, the new law has been devastating.

It has added to the rising cost of doing business in China - contributing to an exodus of what is estimated to be thousands of factories from places like the Pearl River Delta in southern China, for 20 years synonymous with cheap and abundant labor and the engine behind China's rapid growth.

The new law, which company owners and industry associations said can add 10 to 25 percent to manufacturing budgets, has been so painful that some foreign factory owners have snuck away in the middle of the night to avoid confronting and paying angry workers.

A survey released in March by the American Chamber of Commerce in Shanghai and Booz Allen Hamilton found that a fifth of companies with foreign ownership or investment have concrete plans to move some or all operations out of China. In the Pearl River Delta, which produces about a third of the country's exports, an estimated 10,000 companies are planning to scale back or shut down, according to a survey by the Federation of Hong Kong Industries.

Not all of these companies are leaving the country, however. Many say they are moving to less developed parts of China that offer tax breaks and other incentives to offset the increasing costs associated with the new labor law.

The law requires firms to provide contracts that include pension and insurance contributions. It also requires companies to pay workers who are fired a month's wages for every year worked.

Another costly component of the new law regards overtime. For extra hours on a weekday, companies need to pay workers 1.5 times the normal rate. On weekends, it's double time. On official holidays, it's triple time.