The Chinese Government issued new regulations for the management of foreign labor service enterprises to protect workers sent overseas and boost the development of foreign labor cooperation.

The regulations will go into effect on August 1.

Foreign labor service enterprises will each be required to create a bank account containing no less than 3 million yuan ($47.62 million) to be deposited in banks designated by authorities in order to cover potential risks, according to the new rules.

The funds will mainly be used to cover service fees, wages, compensation for losses and emergency expenses when labor service enterprises fail to pay.

Foreign labor service companies should help workers protect their legal rights, the regulations said, adding that companies will be obliged to provide compensation that foreign employers fail to provide.