Thinking of Recruiting Employees in China? Explore the Basic Points

The most common problem foreign companies face is that the Chinese government does not allow the Chinese companies to send money to the foreign clients they owe. As the Chinese government made it really hard to get the money out of the country, it has become really problematic for the foreign companies to get the money they owe. The ideal solution is to get complete knowledge about the China deal and act according to the category of transaction.

As more and more companies are considering entering into the Chinese market, employment law becomes more relevant internationally. Companies, both domestic and international companies operating in China need to strictly maintain employment law. There are a set of rules that every employer in China has to abide by while considering the recruitment of local Chinese or foreign employees.

There are so many key provisions China lawyers suggest companies to keep in their employment contract, such as:

  • Go for a written employment contract
  • Make China-centric employment contract
  • Infuse employee rules and regulations manual
  • Lock in your ID
  • Keep the section of probationary period

Hiring employees from Hong Kong, Taiwan and Macau in the Chinese mainland requires meeting certain legal procedures and receiving proper government permission. The present Provisions are formulated according to the Labor Law of the People’s Republic of China and other relevant laws and administrative regulations.

Certificates required to be obtained for employing foreign employees

  1. Working Permit
  2. Employment License
  3. Residence Permit

Employment law of Beijing

The employment law of Beijing is based on federal and state constitutions, legislation, administrative rules, and court opinions. A particular employment relationship may also be governed by a contract. Foreign talent in Beijing will receive more social security, including better incentive mechanisms, mutual recognition of international professional qualifications and better social insurance standards.

The types of employment in China can be divided in full-time employment, part-time employment and dispatch employment. China’s labor laws use employment contracts as the basis for employment agreements. Under China employment law, which requires a written contract with penalties for employers who do not have one.

Doing business can be really difficult in this country as China’s employment laws and rules just keep getting more complicated, more pro-employee, and more localized. Labor disputes can be really expensive, time-taking and inconvenient. An HR audit can offer you a sense in advance about the hidden HR-related problems and complications, as well as possible compliance issues against a backdrop of China’s ever-evolving rules and regulations.

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How to Fire a Probationary Employee in China

The labor law of China is quite comprehensive and it is not hugely different from other European countries. But still China’s employment law is exclusive in its own way and it is really important to have a proper knowledge about labor law for conducting business with this country. As an employer you need to understand the fact that China is not an employment-at-will country, and when it comes to terminate an employee who is in probation it becomes even more difficult and complex.

During the probation period, there are expanded grounds for dismissal of employees, and termination during the probation period is easier and cheaper than after its expiration. Probation period is stipulated in a labor contract with a period to complete the prescribed work or a labor contract with a fixed period of less than three months and it has been performed.

For a better understanding, we are giving you a life-like scenario. A foreign employer appointed a Chinese employee on the first of January and keeps him/her on the two months probation period ( two months is the maximum probation period in China). Within this probation period, the employee finds that the hired person is not performing well and far below to their expectations and the employer has decided to sack the employee but the termination notice is given to that employee on the first of March that is one day after the employee’s probation period ended.

The employee can go to the court against his/her former employee, raising the issue that he/she has been given termination notice after the probation period. The Chinese courts will rule that the late termination signifies that the employer cannot use “failure to meet the conditions of employment during the probation period” as a basis for unilateral termination without severance pay. It shows that even a one day can make a huge difference in China.

The notable thing is that, when an employee in China completes a probation period, the employing authority cannot dismiss him/her on the grounds of probationary rules. This is the reason, China lawyers suggest don’t try to fire any employee by reason of incapability of doing one’s job unless this reason is stipulated in your recruitment advertising. Employers should carefully document any breach of the rules and regulations and serve written notice thereof. It is also essential for the employers to check their overall HR practice regarding probation period across their organization.

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