Chinese economy as the world's fastest-growing major economy with growth reates averaging 10% over the past 30 years.
Increasingly more companies are opening offices in, or relocating to China.Concerning Labor Law China has two main laws that underpin Chinese hiring practices knowledge of these is therefore essential.
This article will provide a summary of of the rules that foreign conpanies should be aware of when recruiting in China.
What kind of employees can you hire in China?
The options for foreign companies for hiring employees in China depend on their scope of business and legal status in China.
1. Chinese Employees ？
If the branch in China is a representative office of the foreign company it is not allowed to directly hire Chinese employees. Instead it must use a recruitment agency that will employ people on behalf of the representative office, for a period of at least two years.
Wholly foreign owned enterprises and Joint-Ventures can directly hire Chinese and foreign staff.
2. the Youth under the Age of 16？
There are few restrictions on potential employees. According to labor law China forbids the hiring of employees under the age of 16. Requesting an identification document (e.g. passport) is a way to verify a candidate’s age.
3. Other Companies' Employees ?
Hiring an employee currently under contract with another company is not illegal. However, the employer would then become jointly liable with the employee to compensate the financial loss of the former employer.
4.Foreign Employees ?
Hiring foreign employees for your company is possible, however, there are certain conditions attached. A company’s ability to hire foreigners is linked to that company’s registered capital.
Essentially, the higher your registered capital, the more foreigners you’re able to hire.
Conditions may vary from city to city, you can contact us.
Why must you sign a written contract ?
It is possible for an employee to start working on the basis of an oral agreement with the employer. However, a written contract must be signed with the employee within one month of the day the employee started working.
If this does not happen the employee is entitled to twice the agreed on monthly salary until a contract is signed. The same goes for renewing expired contracts. Therefore it is best to make sure the contract is signed before the employee starts working, so as to avoid the employee stalling negotiations to receive the double salary.
Also, if an employee signs a second renewal of a fixed-term contract or has worked for the same employer for a consecutive period of 10 years, it is obligatory for the employer to offer the employee an open-term contract.
Special needs while signing a contract
It is a legal requirement for employers to draft a strong employment contract in China, spelling out the job responsibilities, compensation, benefit entitlement and termination requirements. SKY recommend that employers clearly state an employee’s monthly salary, how many months it will be paid, and the total annual salary when issuing an offer letter.
These are some of the issues you should keep in mind when drafting a contract:
1. Minimum Wage
China has a minimum wage requirements that differ by region. We recommend that you research the minimum wage and average wage in your region. It is however important to note that foreign employers are expected to pay roughly double or more, than the minimum wage.Zhongshan's minimum wage is 1510 yuan.
2. Standard Working Hours
In China the normal working day is eight hours and the normal working week should not exceed 40 hours.
3. Insurance
Since 2011 foreign nationals are required to contribute to all five kinds of insurance at the same rate as the Chinese nationals, including pension, medical insurance, occupational injury insurance, unemployment insurance and maternity insurance. Both employers and employees are required to make contributions in accordance with local regulations.
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In conclusion, when hiring employees in China make sure to know all relevant regulations, this will not only help protect the company's own interests,but will also help give you a better position when hiring a good employee.
