The revised Labour Contract Law, affecting tens of millions of workers, has been criticised by industry experts, businesspeople and labourers.
The law, which took effect on July 1, regulates the use of outsourced staff.
Under the new regulations, they can only be used in temporary or auxiliary positions, or used to replace company staff for a short period.
They should not make up more than a certain percentage - yet to be specified - of full-time staff and must receive the same pay as peers doing the same work.
Both experts and industry players said they were concerned about the high number of outsourced staff being used compared with full-time workers.
And a survey by website people.com.cn  indicated the casual workers at Guangdong Mobile in Guangzhou were earning just a third of the pay of company employees.
The All China Federation of Trade Unions, which recently launched a campaign to raise awareness of the new law, suggested that the proportion of outsourced workers to those directly employed was no more than 5 per cent, the Workers' Daily said.
But a manager from 12333 hyou.com  a labour agency in Shanghai, said the real figure was far higher and the revised law had had a major effect on his company.
"On average, more than half of the workers at the enterprises we work with are dispatched by us - in some cases the figure is 90 per cent," he said.
"If we followed the rule that the percentage should be limited to 10 per cent, as some authorities are saying, my company would shut down within one or two years."
He Xiaoming, an outsourced worker in Guangzhou, questioned the "same work, same pay" rule.
"This rule has been mentioned for years, but as a humble worker, how can I get the evidence to prove I do the same job as people with full-time contracts?" he said.
Cheng Yanyuan a labour law professor from Renmin University of China, agreed with He, saying that "even if two people are in the same positions, employers can say there are differences in their qualifications and performance".
Outsourcing has thrived in the past few years since the Labour Contract Law legalising the practice came into effect in 2008.
Economic fluctuations also affected the labour market, said Feng Lijuan, a human resources expert from 51job.com  an HR services provider.
"The flexibility of this labour model fits the demand of enterprises that need workers when their business prospers, but can then just let them go when they are in a downturn, without any risk of labour contract disputes," Feng said.
Most of the affected workers were in labour-intensive industries such as customer services, retailing, courier services and manufacturing, she said.
Liu Kaiming, director of the Shenzhen Institute of Contemporary Observation, a civil-society group, said the revised law was meant to prevent excessive use of such services.
But Liu said: "This labour-manipulating model is used too often, especially in state-owned enterprises and government departments."
On the positive side, Liu said: "Now the law recognises that these workers are entitled to get the same remuneration as their colleagues who are hired directly and are doing the same job. So as long as you can prove you are doing the same job as the people with contracts, you can file a lawsuit."
Carol Luo, the human resources manager of a joint-venture medical equipment factory in Beijing, said it would closely evaluate whether so many outsourced positions were necessary now the revised law had taken effect.
She said labour costs would rise since most of the extra staff posts were indispensable.