Is Your Contract Not Being Renewed? You Are Entitled To Sev Pay


Is your employment contract coming to an end? Are you being told that you won't be renewed for the next semester? Are you being let go before the summer holiday starts?

If the answer is yes, I have good news for you. You are entitled to severance pay—a substantial sum of compensation legally granted to you at the end of your contract.

You might wonder why your previous employers haven't given this to you, claiming it's not written in the contract. This is false because severance pay is a right granted by law. What is mandated by law doesn't have to be specified in the contract, with the exception of Shanghai, which has a local policy requiring severance pay to be explicitly stated in the contract.

So, how is severance pay calculated? The simple formula is 1 year of work equals 1 month of compensation. This amount is rounded up to the nearest half year. For example, if you have worked for 2 years and 3 months, you would be entitled to 2.5 months of severance pay.

However, don't rush to ask your employer about severance pay just yet. To successfully start working for a new employer, you need your current employer to provide a release letter stamped by the company and cancel your existing work permit. After the work permit is canceled, you will also need a cancellation letter to prove it. Both of these documents are required by your new employer to apply for a new work permit. In some provinces like Zhejiang, you also need a recommendation letter, which is a government template that your employer must complete and stamp.

Unethical employers might try to avoid paying you severance by making you sign an agreement that waives their legal liability in exchange for your release paperwork. At this stage, you will have to decide whether to give up the compensation or fight them in a lawsuit to get your release paperwork. Time is also a factor, as you want to go home for the holidays and get your work permit registered under your new employer before you leave.

Therefore, my suggestion is to avoid mentioning severance pay until you get your release documents. Additionally, have a lawyer review any document your current employer asks you to sign to ensure you don't inadvertently waive your rights.

Reach out to me right now for an assessment of your case! We are currently offering free consultations for labor disputes, but this offer only lasts until the end of this month! Our law firm has successfully helped over hundreds of foreigners fight for their rights, and we have a proven track record of winning severance pay. We have 2 whole floors of office space, and over 200 associates ready at your disposal, so do not hesitate to contact me now!