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Employment Contract in China

Employment Contract in China

Updated on Thursday 01st September 2016

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Employment-Contract-in-China.jpgChina’s large size and the potential for development are two of the most relevant reasons why foreign investors choose to open a business in China. The country is attractive for foreign investors also because of its cheap labor, its immense market, and its preferential investment policies. This is why the foreign entrepreneurs who come here must know the legal provisions regarding the employment contract in China for their future employees, in order to provide job security for them. Consequently, the employer must be very careful and obey all the specific regulations and employment law’s provisions in order to keep a clean profile. 
 
In case you are interested, our attorneys in China will offer more information about the matter.
 

Mandatory provisions of the employment contract in China 

 
Chinese employers must have written employment contracts with all of their employees. Under China’s labor laws, the employment contract is required to contain the following mandatory provisions:
 
basic information about the employee and the employer;
the exact duration of the employment contract;
a (job) description on the type of work the employee will perform;
the workplace;
the working hours;
rest and leave time;
social insurance;
remuneration;
the work conditions and protection against occupational hazards and applicable labor protections;
other aspects that should be included in the contract under any laws or regulations.
 
Our Chinese law firm will provide support regarding all relevant aspects of concluding an employment contract in China.
 

Other important conditions of the employment contract

 
Chinese employment contracts must be in writing. Generally, the establishment of an employment relationship is subject to the satisfaction of the following conditions:
 
the employer and the candidate are in compliance with relevant laws and regulations;
rules and systems regarding employment provided by the hiring entity in accordance with relevant laws are applicable to the individual; the individual will be under the management of the hiring entity, and the individual works on tasks given by the employer in exchange for a wage; 
work provided by the employee to the employer is a part of the employer’s business.
 
The failure to conclude an employment contract in China can have the following consequences:
 
when an employer fails to conclude a written employment contract with an employee for more than one month, but less than one year from the start of employment, it must pay double the employee’s monthly wage to the employee each of the following months;
if, after a year from the day of employment, the employer still has not concluded a written contract, a permanent employment contract is considered to have been concluded between the employer and the employee.
 
If you want to be sure that as an employer you will follow all the labor regulations, please contact our Chinese lawyers for specific guidance on employment contract in China.
 
Moreover, given the mandatory employees’ engagement pursuant to a written employment contract, it is very difficult to terminate an employee during the term of the contract. An employee can only be fired for cause clearly proved. Therefore, the employer must maintain careful discipline records to be able to establish grounds for dismissal and a detailed set of rules and regulations. This situation makes the employment relationship and the employment documents much more controversial.
 
Our team of lawyers can provide trustworthy assistance and can help you understand all the provisions of the employment contract in China. For further details feel free to contact us.
 
 

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