Drafting China Employment Contracts
An employment contract is an agreement in which the employee agrees to provide labor to the employer in exchange for working conditions and compensation. Employment contracts are required in China, and their main goal is to protect the rights of workers and make sure they are treated fairly.
To conduct business in China, you must know about Chinese labour laws. According to the Chinese Labour Contract Law, if an employer fails to sign a written employment contract with a worker for more than one month from the date of employment, the employer is required to pay the worker twice the monthly salary. Therefore, companies that ignore the importance of the employment contract will incur unnecessary losses.
The Main Content of the Employment Contract In China
While employment contracts are largely left to the discretion of the employee and employer to negotiate commercial terms, Chinese labour contract law requires that the following key elements be included:
- The name and address of the employer
- The name, address, and ID card (or other valid ID) of the employee.
- The duration of the employment
- Job description and place of work.
- Working hours, rest periods, and holidays.
- Salary.
- Social insurance.
- Labour protection, workplace safety, and occupational hazard protection.
- Other matters stipulated by laws and regulations.
Before signing the employment contract, both parties should specify the date of termination. Generally, the employee may terminate the contract by giving 30 days written notice to the employer. When an employer is behind on paying wages and acts violently or threatens the worker, the worker can end the contract without giving notice.
As for the employer, the contract may be terminated with 30 days’ notice in the event of the employee’s inability to perform the job (not due to a work-related injury or illness). If the employee breaks a lot of the company’s rules or does something illegal, the job could end without warning.
Things to Note When Hiring Foreigners
Foreigners who live in China permanently and work there must get either a Z visa or an R visa.
The Z visa is the most common one. The company must apply for a foreigner’s employment permit for the employee before they enter the country. The employee can enter China after obtaining a visa at their own country’s embassy. Documents to be prepared include a 15-day work permit for entry, an employment permit for foreigners, and an employment contract.
The R visa, on the other hand, is a special visa issued by China to allow high-level foreign talents and urgently needed talents who meet the market demand orientation to enter China multiple times over a period of 5 or 10 years. Check out the China Employment Visa Application Service and the China Entrepreneur Visa Application Service for more information.
How Can 3E Accounting Help You?
A well-drafted employment contract is a basic but delicate task that helps companies attract talent. Of course, most companies are capable of drawing up employment contracts, but with the help of a professional service provider, you can better understand your company’s rights and obligations. Choose 3E Accounting for expert advice on drafting Chinese employment contracts and allow us to assist you in recruiting talent to help your company grow. Contact us now!
