Hiring employees in China can be extremely complex for overseas firms. Language barriers and cultural differences make hiring difficult. If you have your own business in China, at some point in time, you may feel the need to hire local Chinese personnel.
There are a set of rules that every employer in China has to abide by while considering recruitment of local Chinese or foreign employees. Although the process of hiring a local Chinese employee is much more straightforward than that of hiring a foreign national, there are still many considerations in deciding to go this route.In general, Chinese citizens may not be hired directly by foreign companies.
International employees can be employed only with special permission from the local labor authorities and after obtaining an employment certificate for the employee. In addition, employees are generally required to have proof of residence in the city in which they apply for employment. This restriction is mainly to prevent floods of rural workers from competing for jobs in Beijing, Shanghai and Guangzhou. It has been only loosely enforced, and is more likely to be enforced for high paying, professional, jobs.
The Employment Contract-
Under the People’s Republic of China’s (PRC) Labor Law, all companies are required to sign employment contracts with their employees. The first thing to know is that employment contracts are mandatory in China, and should be drafted in Chinese as well as the home country language for expats. Otherwise, they may not be enforceable if there is a dispute. While there is no standard contract form, the agreement should include:
- Term of contract & probation period
- Job title and description
- Labor protection and working conditions
- Termination conditions
- Breach of contract provisions & disciplinary rules
- Other provisions such as Training Bond, Non-disclosure agreement, and Non-compete agreement
Why Fixed-Term Contracts are the Best for Hiring China Employee–
Fixed-term contracts are the best way to manage employees because it provides a way to dismiss an employee when the term of the contract is up. This is the easiest way to end the relationship if the employee’s performance is not matching your expectations. However, the minimum length of a fixed-term contract in China is two years. Fixed-term contract can be of any length and it can only be renewed once. On the occasion of the second renewal, the contract effectively becomes an open-term contract. The length of the fixed-term contract will determine the maximum length of the probation period that the company can offer to the employee.
Finding and hiring people never was an easy task. And it becomes even harder then we talk about a foreign company hiring Chinese employees. Thus, as an overseas company operating in China, it’s essential to do your best to adapt to the recruiting habits of Chinese recruiters.
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