Domestic workers receive childcare training at a community center at Luocheng Mulao Autonomous County, Hechi City, Guangxi Zhuang Autonomous Region, on Aug. 26. Photo: CNSphoto

Since the 1970s, informal business models, elastic production, flexible employment, and job instability have profoundly impacted politics and the social economy. The rise of the informal economy has instigated changes in labor organization and management, giving rise to a proliferation of labor intermediaries. This trend has spawned new labor relationships, frequently involving agencies, particularly in the service and information technology industries.

From the 1990s onwards, China’s domestic service sector has shifted from informal to formal management and corporatization. Intermediary agencies have become the primary business form, engaging in tripartite service agreements with domestic workers and family employers, providing training for workers and after-sales management services for employers. This has led to a distinct “management-oriented intermediaries” model. As a key participant in China’s domestic labor market, there is a growing need for research into the unique management forms and operations of these agencies

Trend for formalization

The state has promoted the formalization of China’s domestic service sector since early 2000s, which carries two profound implications. Firstly, it strives to enhance “service quality” by fostering professionalization of domestic and care work. Secondly, it seeks to secure formal employment arrangements for domestic workers via promoting the “employee model” (to replace the “intermediary model”), encouraging domestic service companies and employees to formalize labor contracts, acquire workers’ social insurance, conduct personnel training and management, and deliver enhanced services to families through labor dispatching.

The enhancement of professionalism is chiefly driven by domestic service companies, yet the implementation of formal employment has encountered significant challenges. These include the consistent signing of labor contracts and the purchase of social insurance, which elevate operational costs and risks for companies. Moreover, the feasibility and sustainability of government support for contracts and insurance are weak, and tension between labor law requirements/regulations and the inherent characteristics of the domestic service industry remains unresolved.

A recent modification to the “employee model” stipulates that domestic workers, upon signing service agreements, can voluntarily opt for urban workers’ social insurance or urban/rural residents’ social insurance as “flexible employees.” Therefore, the “employee model” has somewhat lost its significance in terms of labor security for domestic workers, while granting the service companies the legitimacy to regulate and manage the domestic workers. 

Membership system

Domestic service intermediaries employ three primary mechanisms. Firstly, the membership system design categorizes household employers as consumers, with the agency serving as a management-oriented intermediary that coordinates the relationship between workers and employers. Secondly, through “manufacturing-matching” as the interest adjustment mechanism, domestic service companies shape a differentiated market, expand bargaining space, and control pricing. They oversee services, determine wages, and ensure better job opportunities. Lastly, intermediary companies aim to create a home-like atmosphere to emotionally integrate domestic workers, fostering commitment to the company. Through these mechanisms, they assist employers in recruiting and retaining qualified service providers.

Unlike traditional domestic service intermediaries, the membership system charges service fees to both employers/customers and domestic workers, replacing the one-time introduction fee. This shift makes service fees from employers the primary income source for intermediary companies. Consequently, the company provides “management services” for employers, who enjoy “packaged services” as consumers, including labor recruitment, demand matching, and service quality control. For domestic workers, membership signifies “trusted management,” with the intermediary company advocating for their rights, providing training, and managing them like employees.

The membership system represents a shift in the business strategy of domestic service companies, moving from merely matching supply and demand to ensuring stability and consistency. Previously, charging fees per transaction resulted in low profits and high dependence on market expansion. The membership model now guarantees service time and facilitates long-term transactions, improving profits and stability. This system seeks long-term transactions between employers, service companies, and domestic workers, allowing service companies to retain their role as intermediaries without the labor costs and risks of a legal employer, while enhancing their power to manage the labor force. 

Although the membership system allows domestic service companies to gain legitimacy by assuming a management role, the legal ambiguity of their tripartite service agreement is evident, and the cost of breaching this agreement is low, with weak institutional constraints. Consequently, their contracts with domestic workers function as a light deterrence. Domestic service agencies adopt an interest adjustment mechanism that includes both reshaping the market structure and intervening labor matching processes, summarized as “manufacturing matching.” Specifically, they first shape a differentiated market structure, increasing service prices by highlighting the skills of domestic work and implementing differentiated pricing to create bargaining space. Then, they manage job acquisition, controlling pricing power and bargaining processes to determine the job opportunities and working conditions of domestic workers.

Large domestic service companies reconstruct the structure of the domestic service market, transforming flat-rated service prices into a differentiated market with classification and grading. The basis for grading is knowledge and skills, typically translated into simple and intuitive operational criteria—certificates and work experience. The classification and grading pricing system practiced by large domestic service companies has two effects. First, it enhances the market price of domestic service through making the “skills” in domestic and care work visible. Second, it forms a differentiated market, providing a structural possibility for service bargaining. In this process, as the creators of service standards and prices, these companies wield significant influence over the pricing mode previously dominated by supply and demand.

Support for domestic workers

The support provided by domestic service companies to domestic workers is initially evident in the various training opportunities offered. The training aims to ensure rural women they recruit, who compose the majority of domestic workers in urban China today, to present an image of professionally-trained worker with an urban aesthetic and an service mentality. This strategy creates the perception that domestic workers supplied by these companies are “highly qualified” and deserving of higher wages. 

Domestic work primarily occurs in private homes, with some workers living with employers. Trust, dependence, and complex social relationships are crucial, shaping the triangular dynamic between employers, service companies, and workers. Managing the reproduction of workers is a key aspect of agency management, involving ensuring service provision and assisting workers with their personal lives and prioritizing company ties.

In this regard, these agencies often leverage the female identity and experiences of domestic workers to facilitate emotional integration by “acting as their natal family (niangjia).” This involves transplanting and transforming the structure of a traditional patriarchal family, with the employing family introduced as the “in-law’s family,” reinforcing the cultural notion that, no matter how well a worker gets along with their employers, they will remain as outsiders to the latter. 

Domestic service companies typically establish dormitories, allowing domestic workers who are members to pay a nominal fee for accommodations, well below market rates. This not only provides a resting place for those who are on breaks from work, but also serves as a means to control the flow of labor.

Domestic work frequently entails emotional labor, a reality particularly pronounced for domestic workers residing with their employers. In such cases, workers often find themselves operating within tense social environments for extended hours. Prioritizing the maintenance of a functional service relationship, the company places a central focus on workers suppressing negative feelings. Consequently, a fundamental aspect of the support offered by these companies is geared towards transforming and alleviating the stress experienced by domestic workers. Functioning as an emotional valve, the company endeavors to mitigate workers’ dissatisfaction. Agents actively engage in mediation, guiding workers to navigate and process emotional stress in a manner aligned with the company’s objectives.

Domestic service companies play a crucial role in mediating disputes between domestic workers and their employers. In the realm of domestic services, the utilization of formal legal channels for dispute resolution is both challenging and costly. Consequently, companies, employers, and domestic workers frequently opt for private settlements, with the intermediary company intervening at its own discretion. This necessitates a strong foundation of trust between intermediary agents and domestic workers, relying on a moral sense rooted in solidarity. Although this form of private, trust-based protection may not be regularly invoked, it holds significant importance for domestic workers hailing from rural areas with limited cultural and social capital. The assurance that a domestic service company will advocate for its workers’ interests not only contributes to the company’s long-term development but also fosters a sense of reliance among workers, encouraging them to cultivate a private relationship with their intermediary agent.

Summary

The management and professional development role of domestic service companies significantly impacts domestic workers. On the positive side, management-oriented companies enhance the market position of workers, particularly in terms of skills, income, and power relative to employers, through skill cultivation and professional training. Additionally, the involvement of large domestic service companies supports workers’ rights and protects their interests.

However, these companies often adjust their management strategies to align with their own interests in the current market and policy context. While not assuming the responsibility of being an employer (remaining an intermediary), the management of domestic workers tends to be heavy on organizational control and light on institutional guarantees. The protection of domestic workers is thus limited to personal safety and basic economic interests, relying heavily on the personal will and capacity of each intermediary agent and their relationship with the worker.

Previous studies often focus on the binary framework of “production-reproduction,” viewing the control of daily life as a complement to the labor control in the production field. As the service industry expands, many reproductive activities shift from the family to the market, transforming original unpaid labor in the private sector into paid labor in the public sector. The work of domestic workers is intimately connected to their private lives, prompting companies to exert comprehensive control over workers’ daily lives. This close integration of work and life not only forms a crucial foundation for the interest adjustment of domestic service companies but also serves as an opportunity for companies to implement emotional integration.

Xiao Suowei is an associate professor of sociology at Beijing Normal University; Chen Zongshi is a professor of sociology at Zhejiang University; Yang Yimeng is from the JD Group.

Edited by YANG XUE