Employment Law in China

Employment Law in China

Updated on Thursday 26th May 2016

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The Employment Law in China includes a number of laws for hiring national and foreign employees. The Labor Law, the Labor Contract Law, and the Social Insurance Law are all drafted and enforced by the Ministry of Human Resources and Social Security of the People’s Republic of China.
The key legal principles of the Employment Law concern the types of employment contracts, the benefits/entitlements for the employees and ways to terminate the employment relationship. Our law firm in China offers services in a number of important areas for doing business in China, including employment. Our Chinese lawyers can help you hire or fire employees and settle any liabilities that may arise from an employment contract in China.

The employment contract in China

According to the provisions of the Chinese Labor Contract Law, an employment contract in China must include the following information in order to be considered valid:
- identification details for the employer and the employee;
- the expiration date;
- job description and details about the place of work;
- work hours, rest and vacation;
- remuneration;
- social security obligations;
- workplace safety and health information.
Employment contracts in China can be concluded for a fixed period of time or they can have a flexible duration period. Probation periods can also be agreed upon, however, not for more than six months. The termination of an employment agreement must be made by means of a 30 days’ notice.
Standard employment agreements do exist, however, the content of the employment contract should be adapted to the specifics of the work involved. A Chinese attorney can help you include special provisions in your work contract and make it suitable for various types of professions.
The employment contract should be signed within one month after the employee has commenced work. If the employer fails to do so, he may be subject to a penalty (a fee payable to the employee). 
An employment contract may be terminated by the employer or the employee. The employer may terminate the agreement without notice and with no penalties. However, this can take place only in specific cases like if the employee did not meet the criteria during the probation period or if he is accused of a serious breach towards the company. An employee can also be dismissed without notice if he is under prosecution for a criminal offence. When an employee wishes o terminate an employment contract he must provide a 30 days' written notice.

Labor regulations in China

According to the law, the maximum amount of working hours in China is eight hours a day and 40 hours a week. Alternative working hours can be applied. Employees who work more than the legal amount of time per day or week are entitled to compensation: 150% of the normal wage for overtime on workdays and up to 300% of the normal wage for overtime on statutory holidays. Maternity benefits exist for female employees. Mothers are entitled to maternity benefits: a maternity leave of at least 98 days or more for each additional child (if applicable). A national age of retirement applies in China and it is larger for male employees than for women.
The annual leave for employees is set according to the employee’s seniority. Those who have worked for at least 20 years are entitled to the largest amount of days of annual leave: 15 days. Maternity benefits exist for female employees.
Our law firm in China can help you hire employees and manage any existing employment agreements. You can also contact our Chinese attorneys if you need help with other legal matters.