China’s Proactive Employment Law Foreign Employers Must Understand


China has a proactive employment policy to make sure the unemployment rate within a socially tolerable range. From hiring to termination, China employment law covers everything. Foreign companies need to understand the Chinese employment law thoroughly before taking on any decisions regarding their China employee.

China employment law basically involves the following areas

  • Employment Contracts
  • Remuneration or Salary
  • Workplace Safety
  • Procedures for Negotiations
  • Labor Disputes
  • Working Hours
  • Protection from Discrimination
  • Compensation or Wage Regulations
  • Training
  • Social Insurance


On February 7, 2020, the PRC Ministry of Human Resources and Social Security has issued the Opinions on Stabilizing Employment Relationship during the Period for Prevention and Control of the Novel Coronavirus-infected Pneumonia Epidemic to Support Enterprises in Resuming Work and Production (the “Opinions”). Local regulators have issued various similar notices in this regard in Shanghai and Guangdong province. A foreign employer must follow all the legal responsibilities stated in the China employment law. The two China employment laws that all foreign investors must consider before commencing a business in the country are:


  • 1995 Labor Law of the People’s Republic of China
  • 2008 Labor Contract Law of the People’s Republic of China


Few key points of China employment law

  • In China, labor relationships may be reinstated even after termination– employers may be forced to re-hire terminated employees.
  • Chinese labor law is primarily based on employment contracts. Oral assurance and offer letters are not valid documents to establish labor relationships.
  • The severance pay structure in China is quite peculiar. Sometimes a senior manager’s severance cost is lower than a junior employee’s.
  • PRC lifts restrictions on wholly foreign-owned HR service companies and the Ministry of Human Resources and Social Security issues notice on electronic employment contracts.
  • China takes steps to reduce employer’s contributions to disabled persons’ protection funds and Guangzhou issues guiding opinion on employment disputes.


In spite of not willing to violate China’s overtime laws, many foreign companies frequently break it largely because the China labor laws are incredibly complicated and most English language translations of them are woefully inadequate. Appointing a trusted China business lawyer can solve this problem. It is a piece of golden advice to all the foreign employers to keep an experienced China attorney by their side all the time.


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