[Direct answer]In the Beijing area, the core difference is between "managing people or managing tasks": labor dispatch is when the dispatch company sends people to your company, and you directly direct them to work. The labor management rights lie with the employing unit; outsourcing is when the contractor hands over the entire business to the outsourcing company, which then dispatches its own staff and manages them independently. You only need to accept the results. If the name is outsourcing, but in reality, it is managed in the same way as labor dispatch, it is "fake outsourcing, real dispatch", and it should be handled in accordance with the rules of labor dispatch.

1. Problem background and typical scenarios

A typical confusion in corporate employment: transferring non-staff positions to outsourcing companies to reduce costs, but the employees are still the same and the reports are still submitted to the original department; outsourced employees work for three years, only to find out that the contract is signed with an unrelated outsourcing company when they suffer work-related injuries; and employers with excessive dispatch ratios are eager to "transfer to outsourcing" to evade supervision. Workers' confusion: Who exactly am I employed by, and who should I turn to in case of an emergency?

II. Key points of contention

First, the standard for dividing management rights. Who makes decisions on attendance, scheduling, performance, and work instructions is the dividing line between dispatching and outsourcing; outsourcing companies must implement true autonomous management of workers. Second, differences in settlement methods. Dispatching settles service fees per head, while outsourcing settles according to business volume and results, and the settlement documents are qualitative evidence. Third, the consequences of identifying false outsourcing. Those named as outsourcing but actually dispatching will be treated as dispatching, with all related responsibilities, equal pay for equal work, and employment ratio rules fully applicable. Fourth, the disparity in workers' rights. Outsourced workers' labor relations are with the outsourcing company, not with the contracting party, and their rights remedy paths are different.

III. Professional analysis by Henglue Lawyers

The distinction between the two employment models can be explained in detail with a comparison table: **Management Rights** - Dispatched workers are under the daily command of the employing unit (attendance, scheduling, and task allocation are managed by your company), while outsourced workers are managed by the outsourcing company (the employer only interacts with the project manager and reviews the delivery results). - Settlement: Dispatched workers are paid monthly based on headcount, while outsourced workers are paid based on project progress and workload. - Contract Subject: The dispatched contract focuses on "people," while the outsourcing contract focuses on "projects." - Risk Assumption: The illegal termination of dispatched workers and occupational injury risks are shared between the employing unit and the dispatching company, while the operational risks of outsourcing are generally borne by the outsourcing company. **Identifying and Defining False Outsourcing:** Judicial review focuses on substance rather than form—whether the outsourcing company has actual management control (who handles attendance, evaluates performance, and issues work orders), whether settlement is based on headcount or project results, and whether the outsourcing company possesses relevant business qualifications and professional management capabilities. Five typical indicators of false outsourcing include: - Employees working long-term on the employer's premises using the employer's equipment. - Scheduling and attendance managed by the employer. - Employee badges and access controls merged with those of regular employees. - Direct reporting to the employer's staff. - Settlement invoices showing per-head pricing. The consequences of identifying false outsourcing are subject to dispatching rules—joint liability, equal pay for equal work, and quota controls all apply, amplifying the employer's cost-saving efforts while shifting responsibility. **Enterprise-Side Compliance Transformation Path:** - Implement true outsourcing: - Transfer actual management rights (attendance, scheduling, and performance evaluation implemented by the outsourcing company with documented records). - Settle based on project output (invoices and settlements linked to business activities). - Ensure the outsourcing company possesses management capabilities and qualifications. - Transitional risk points: - "Transferring" existing dispatched workers to the outsourcing company while maintaining their original work arrangements is a common pitfall of false outsourcing. Transformation must include management system reform. - Worker's Rights Map: - Outsourced employees maintain labor relations and social insurance with the outsourcing company. Occupational injury claims are filed by the outsourcing company, and no formal labor relationship exists with the employer. - Two exceptions: - In cases of false outsourcing recognition, the employer shares joint liability with the dispatching company. - Where the employer is at fault for damages, the employer bears liability. - Daily records (scheduling, instruction sources, wage payment entities) serve as evidence for future determinations. Beijing's arbitration and court systems unify standards for assessing the substance of outsourcing and dispatching contracts, with the management rights evidence chain serving as the anchor for all legal determinations. Enterprises should prioritize compliance before transformation, while workers should preserve evidence in their daily work.

IV. Practical suggestions and legal basis

The first step is a substantive self-inspection: comparing the three elements of management rights, settlement methods, and contract subject matters with their qualitative definitions. The second step is enterprise transformation: ensuring the transfer of true outsourcing management and the implementation of corresponding settlement measures to avoid the simple transfer of pseudo-outsourcing. The third step is employee record keeping: regularly documenting evidence of instruction sources, attendance subjects, and wage payments. The fourth step is dispute qualification: claiming joint and several liability and equal pay for equal work based on the dispatch rules. The main legal basis includes Articles 57 to 67 of the Labor Contract Law of the People's Republic of China (amended in 2012) (Dispatch Rules); the Interim Regulations on Labor Dispatch; and the Judicial Interpretation of the Supreme People's Court on the Trials of Labor Dispute Cases. Specific applications shall be subject to the currently effective regulations.

5. Henglu Law Firm's Reminder

The dividing line between outsourcing and dispatching lies in "who is managing the employees": where the management power lies, where the responsibility lies. The nominal contract label is not a protective talisman. When enterprises change their employment model, they need to change their management methods at the same time. Employees should rely on daily record-keeping to fix the true employment status - the qualitative battlefield is always in the evidence. For issues related to the compliance of employment models and labor disputes, you can consult us for assistance.Labor arbitration and work-related injury compensationYou can refer to it when designing the employment structure of your company to obtain a comprehensive solution for your services.Business and contract disputes in enterprisesFor reference, you can check the sections related to work-related injuries and damage compensationPersonal injury and medical disputesThe plate, which involves customizing employment solutions, can be combined with other modules to form a comprehensive solution.Specialised legal servicesPlate consultation.

VI. Frequently Asked Questions

Q1: Do outsourced employees have a labor relationship with my company?

In principle, there isn't. The labor relationship is with the outsourcing company. If it is determined to be false outsourcing, it will be handled in accordance with the dispatch rules.

Q2: How to determine if it's a fake outsourcing company?

Looking at the essence of management authority: Who is in charge of attendance scheduling, performance directives, and whether the compensation is based on headcount or results.

Q3: Who is responsible for work-related injuries if they occur during outsourcing?

The outsourcing company shall declare and bear the responsibility. If the employer is at fault, the employer may be held accountable according to the degree of his fault.

Q4: Can outsourcing avoid responsibilities in the process of sending employees overseas?

No. The transfer of staff and the original management method constitute false outsourcing, and they shall be dealt with in accordance with the associated rules of dispatch.

Q5: Can outsourced employees claim equal pay for equal work?

There is room for advocating for equal pay for equal work within outsourcing companies, but in principle, it does not apply to the employees of the contracting parties.

The above answer is based on the judicial practice in Beijing. The adjudication guidelines in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Labor arbitration legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in a timely manner.