If one was to look on the positive side, some would just see that as the next potential battle. The good thing would be that several agencies that rely upon sending teachers to schools that are not licensed to hire foreigners, will slowly die out if the law gets executed well (We also need to read it first to verify). In addition, shitty training centres that rely upon farming out teachers to public schools for their income, are going to suffer, really bad.

As more schools are forced to hire their teachers directly, standards may inprove greatly. Rather than letting an agency do the dirty work, they will be responsible for whom they hire. I won't use the politically incorrect 'R word' this time, but it should flush out many of those inadequate teachers from the Chinese ESL industry.

It may also destroy part time teaching opportunities, which could be a negative thing for many a public school teacher.

It has never been legal to work for a third party. You have been working illegally. I used to run into foreigners in the PSB where I lived and Id be like hey where do you work, they would say oh I work in and theyd name some city far away. Id be like why are you coming down here to get your visa and not in your own municipality. They were just like I don't know my school told me to. What was actually going on was they worked for an illegal fake school as you do and the person in charge of their school knew someone in my city who had a legit school so they would pay them prolly 10 thousand to 15 thousand to use that schools license to get the foreigner a z visa and res perimt FEC etc.

Ask to see your schools license.
The US is shit, their website tells people to have a z visa to work legally. That is only half the story. I know so many foreigners in china who think they are legal, but they are not. You have to have the right visa and certificates, but it has to actually be sponsored by the place you work at. It is very hard to get those certifications.

I would suggest not resigning.