How do Companies hire Employees in China?
Once staff have been sourced, interviewed and selected, international companies expanding into China must register employees with Social Security Bureau, their local Housing Fund and the State Taxation Administration.
Labor Contract Law regulations include:
• Providing a written contract for full-time employees within one month of first day at work
• Contracts should be in Chinese and translated into a foreign language by legally-accredited organizations
• Details of the employee’s confirmed address and ID number
• The terms of employment
• Location and obligations of the role
• Employees’ rights and working conditions
• Terms for compensation, severance and any disciplinary procedures
• Any probationary period must be included. If the contract is between three and 12 months, the trial period cannot exceed one month; two months for between a one and three-year contract and six months for over three years
• Employer and employee should keep a copy and any changes must be agreed by both parties
Employers have to be aware if any collective or trade union agreements affect the employment.
If the employer fails to provide a fixed-term contract within a year of the employee starting work it defaults to an open-ended contract
Types of Employment Contracts in China
There are three basic types of employment contract:
• Fixed-term, when both parties agree an end date for the contract
• Open-ended (indefinite) where neither party stipulates an end date
• Contracts that expire on completing a specified project or assignment
Under Labor Contract Law, after serving two fixed-term contracts an employee can request being offered an open-ended contract. Employers favor fixed-term contracts for new employees.
If an employee does not sign the contract within a month of starting work, the employer can terminate the contract in writing without having to pay severance compensation, only the wages due.
What Employment Laws Exist in China?
China’s Labor Law and Labor Contract Law establish the legal framework for employment. Extra laws and statutes cover trade unions, arbitration, employees working full or part time, benefits, compensation, working hours and statutory holidays. Laws can vary between states and provinces and include:
• Full-time contracts must be in writing and signed by both employers and employees within one month of starting work
• Statutory sick leave can be between 60%-100% of salary for between three and 24 months, with regulations governed by the Social Security Administrative Department
• Working hours are nominally set at 40 hours per week, with no legal provision for work breaks
• Mandatory minimum paid holiday is five days for one to 10 years’ service, 10 days for 10-20 years’ and 15 days for over 20 years’ cumulative employment. There is no statutory paid leave for less than one year’s employment
• The Maternity Insurance Fund makes legal provision for benefits, set at 100% of salary for a mandatory minimum of 15 pre-natal days and 83 post-natal. Some provinces allow between 128 and 158 days
• The Labor Law (1994) prohibits workplace discrimination based on race, ethnicity, religious beliefs or gender
• Minimum wage levels are set by individual provinces and autonomous regions, not by the state
Sign up for success!
Chinese employment law is a complex mesh of state regulations with regional variations that may also have to incorporate collective bargaining or trade union agreements. Bradford Jacobs provide total understanding of every aspect of China’s Labor Law. The international scope of our Professional Employer Organization (PEO) specialists is matched by the in-country expertise of our Employer of Record (EOR) teams. We can ensure a smooth entry into your new territory.
How do you onboard Chinese Employees Internationally?
Being quickly operational and feeling part of the team – these are two essential elements for employees being onboarded into China, whether they are transferred into the new territory or being recruited in-country.
Transferring existing staff requires compliance with strict and protracted procedures to obtain visas and work permits. Making mistakes risks sanctions and wasting time and money.
The most efficient and effective method of onboarding employees into China is through a global recruitment company such as Bradford Jacobs. Our Professional Employer Organization (PEO) and Employer of Record (EOR) services manage every stage of the process from finding the employee to seeing their first check is paid on time.
Bradford Jacobs recruitment specialists will guide you and your employees through every step of onboarding into the Chinese economy. From talent acquisition, to the complexities of employment legislation, payroll and tax at state and provincial level, Bradford Jacobs tick all the compliance boxes. In addition, our human resources consultants will see your employee blends with workplace culture and etiquette to quickly become productive – and happy.
Translating Chinese Employment Contracts
Drafting contracts for foreign employees poses extra problems in China, above the normal complexities. As in other areas, different provinces impose their own rules. Contracts must be drawn up in Chinese (often Mandarin) and although companies or expat employees can ask for an English version, the Chinese version will be definitive in case of legal disputes.
If a contract is only in English, courts may order a translation or simply rule that it is invalid. Therefore translations should always be by authorized and accredited organizations.
Don’t take risks – contact Bradford Jacobs now
Bradford Jacobs will ensure you comply with Chinese contract laws relating to salary, payroll, benefits and allowances, termination and severance, entitlements, tax and social security. We guarantee your employees’ contracts will comply with all these aspects in Chinese and English.