China’s labor laws are governed by central and local regulations to ensure employee rights and responsibilities are well-defined. Key legislation includes the Labor Contract Law (2008) and the Labor Law (1995), which cover essential aspects of employment relationships.

Key Aspects of Labor Contracts

➜ Types of Contracts

1. Fixed-Term Contracts: Used for specified timeframes, common in part-time or full-time roles.
2. Open-Ended Contracts: Offer job security until retirement, with limited grounds for termination.
3. Project-Based Contracts: Define employment by task completion, with severance upon project conclusion.

➜ Required Elements in Contracts

Labor contracts must include:

1. Employer and employee details
2. Job description and location
3. Working hours and salary details
4. Social insurance contributions

Optional terms such as probation periods and non-compete clauses can be included based on company policies.

Work Hours and Overtime Rules

➜ Standard Work Hours

Employees typically work 8 hours per day and 40 hours per week under standard arrangements.

➜ Special Work Hour Systems

1. Comprehensive System: Hours are accumulated over a set cycle (e.g., monthly).
2. Flexible System: Applied to roles where set hours are impractical, like remote or managerial positions.

➜ Overtime Compensation

1. Extra hours: 150% of normal wage
2. Rest days: 200%
3. Public holidays: 300%

Wage Structure and Social Security

➜ Minimum Wage

Regions set their own minimum wage, which excludes overtime and allowances.

➜ Annual Bonuses

Many employers offer a 13th-month salary, typically provided during the Chinese New Year as a bonus.

➜ Social Security Contributions

Both employers and employees must contribute to:

1. Pension
2. Medical insurance
3. Work injury insurance
4. Maternity benefits
5. Unemployment insurance
6. Housing fund

Employment Termination Rules

Employers face strict guidelines for terminating contracts. Acceptable scenarios include:

• Mutual agreement
• Employee misconduct
• Company bankruptcy or dissolution

Severance pay is required in most cases, calculated based on the length of service.

Guidelines for Hiring Foreign Workers

Foreign employees must meet criteria such as age, health, professional skills, and a valid work permit. Companies must follow specific steps, including obtaining a work visa and residence permit.

Conclusion

Understanding China’s labor laws is crucial for businesses and employees to ensure compliance and maintain harmonious working relationships. Employers should stay informed and integrate these principles into their HR policies to operate effectively within the legal framework.