What Foreigners Need to Know When Hiring Employees in China？

  

Source: OT-Team(G), 人民网

  Foreign nationals hiring employees in China must adhere to various local laws and regulations. Here's a detailed guide for foreign employers to consider when recruiting staff in China.

• Case Example

  Suarez (a pseudonym), a foreign investor from Chile, recently visited Shanghai for a market survey and was impressed by China's open business environment. He decided to register a trading company and now plans to hire several employees. He reached out for advice on what to pay attention to when recruiting in China.

• Legal Expert's Response

  Hello! According to the Foreign Investment Law of the People's Republic of China, particularly Articles 2, 3, and 6, your company is considered a foreign-invested enterprise operating within China. As an employer, you must comply with Chinese laws and regulations, ensuring that your hiring practices do not endanger national security or public interests. We recommend paying attention to the Labor Law of the People's Republic of China and the Labor Contract Law of the People's Republic of China, which provide important guidance.

  Key Points to Keep in Mind:

1.Sign a Legal and Compliant Labor Contract

(1)Under Article 8 of the Labor Contract Law, employers must truthfully inform employees about job responsibilities, working conditions, location, potential hazards, safety measures, compensation, and any other relevant details. Employees, in turn, are required to provide accurate information.

(2)When hiring employees, you should establish labor contracts based on mutual agreement, ensuring clear, detailed terms regarding job roles, working conditions, and compensation.

(3)As a foreign-invested enterprise, you may need to inform candidates if their roles involve liaising with foreign companies or require travel abroad.

(4)Additionally, according to Article 10, if a written labor contract is not signed within one month of employment, employees have the right to claim double wages for the period exceeding one month but less than one year.

(5)If there are changes to the work duties, location, or pay after the contract is signed, these changes should be documented in writing, either through a supplementary agreement or by signing a new contract.

2.Set a Reasonable Probation Period

  According to Article 19 of the Labor Contract Law, the probation period should be reasonable and is dependent on the contract's duration: 

(1)If the contract is 3 months to less than 1 year, the probation period cannot exceed 1 month.

(2)For contracts between 1 and 3 years, the probation period cannot exceed 2 months.

(3)For contracts of 3 years or more (including indefinite contracts), the probation period cannot exceed 6 months.

  Ensure that the probation period is clearly stated in the labor contract. Any probation period exceeding these limits will be invalid, and the employee will automatically be considered a regular employee after the overage period.

3.Comply with Working Hours and Social Insurance Regulations

(1)When recruiting in China, you must provide a safe working environment, reasonable rest periods, and legally compliant social insurance benefits for your employees.

(2)According to Article 36 of the Labor Law, the standard working hours are a maximum of 8 hours per day and 44 hours per week. Overtime must be approved, and the hours and compensation for overtime must be reasonable.

(3)If the job requires flexible hours, you may apply for a non-fixed working hours system or a comprehensive working time calculation.

(4)As an employer, you are also required to contribute to social insurance for your employees under the Social Insurance Law of the People's Republic of China. For foreign employees, the Interim Measures for Foreigners Employed in China to Participate in Social Insurance stipulate that those from countries with bilateral or multilateral social security agreements with China must follow the provisions of those agreements regarding social insurance participation.

4.Special Considerations for Foreign Employees

(1)Under the Exit and Entry Administration Law of the People's Republic of China (Article 41), foreign employees must have the proper work permit and residence visa to legally work in China.

(2)According to the Regulations on Employment of Foreigners in China (Articles 17, 18, and 19), the duration of the labor contract with foreign employees should not exceed five years. If the contract is extended, the relevant visa or work permit must also be renewed in a timely manner.

• Conclusion

  Foreign companies operating in China must ensure that they comply with local labor laws and regulations, including proper contract management, adherence to working hour and compensation laws, and social insurance obligations. Additionally, special attention should be given to the employment and visa requirements for foreign workers. By understanding and adhering to these legal requirements, foreign employers can ensure smooth operations and avoid potential legal risks in China.