Effortless Hiring in China

Employment Contracts

• Chinese law mandates that all employees have a written employment contract. This contract must detail essential terms such as:
• Job responsibilities.
• Compensation.
• Working hours.
• Other pertinent conditions.
• The Labor Contract Law of the People's Republic of China, effective since 2008, governs these contracts. Employers must provide the written contract within 30 days of the employee's start date; failure to do so may result in penalties, including double wages for each month without a contract.

Probationary Period

• The permissible length of a probationary period depends on the duration of the employment contract:
• Contracts of 3 months to 1 year: up to 1 month probation.
• Contracts of 1 to 3 years: up to 2 months probation.
• Contracts longer than 3 years or open-ended: up to 6 months probation.
• During probation, termination by the employer requires admissible grounds, such as the employee not meeting job requirements.

Payroll Frequency

• Employees are typically paid on a monthly basis, with the specific pay date agreed upon in the employment contract. Employers must provide itemized pay statements detailing wages and any deductions.

Minimum Wage

• China does not have a national minimum wage; instead, minimum wage standards are set by local governments and vary by region. Employers must adhere to the local minimum wage applicable to their location.

Overtime

• Standard working hours are generally 8 hours per day and 44 hours per week. Overtime is compensated at:
• 150% of the regular hourly rate for overtime on weekdays.
• 200% for overtime on weekends.
• 300% for overtime on public holidays.
• Employers must obtain employee consent for overtime and adhere to legal limits on overtime hours.

Employee Contributions

1. Social Insurance: Employees contribute to several social insurance programs, including pension, medical, unemployment, and housing funds. Contribution rates vary by region.

Employer Contributions

1. Social Insurance: Employers are required to contribute a percentage of the employee's gross salary to social insurance programs, with rates varying by region.

Income Tax

• China employs a progressive income tax system with rates ranging from 3% to 45% depending on income levels. Employers are responsible for withholding the appropriate amount from employees' salaries and remitting it to the tax authorities.

Types of Leave in China

1. Annual Leave

• Employees are entitled to paid annual leave based on their cumulative working years:
• 1 to 10 years: 5 days.
• 10 to 20 years: 10 days.
• Over 20 years: 15 days.
• Unused annual leave must be compensated if not taken within the stipulated time.

2. Public Holidays

• China observes 11 national public holidays each year. If an employee works on a public holiday, they are entitled to additional compensation at 300% of their regular wage for those hours.

3. Sick Leave

• Employees are entitled to sick leave with pay, the duration and compensation of which depend on their length of service and local regulations.

4. Maternity Leave

• Female employees are entitled to a minimum of 98 days of maternity leave, with additional days for complications or multiple births. During this period, they receive maternity allowances as stipulated by local regulations.

5. Paternity Leave

• Paternity leave policies vary by region, with some local governments providing paternity leave ranging from 7 to 30 days.

Social Insurance Benefits

• Contributions to social insurance provide employees with various benefits including health care, parental benefits, disability benefits, and retirement pensions.

Housing Fund

• Employers and employees contribute to the Housing Provident Fund, which assists employees in purchasing housing. Contribution rates are determined by local authorities.

Notice Period

• Employers must provide a 30-day written notice or one month's salary in lieu of notice when terminating an employee without fault. Employees generally need to give 30 days' notice when resigning.

Severance Pay

• Severance pay is calculated based on the employee's years of service:
• One month's salary for each year worked.
• For periods less than a year but more than six months, it is considered a full year; for less than six months, half a month's salary is paid.

Protected Employees

• Certain employees, such as those pregnant or on maternity leave, have additional protections against termination under most circumstances.