How China Employers Can Manage Labor & Employment Issues in Connection with COVID-19

Amid the COVID-19 pandemic, foreign companies that have business interests in China are facing unprecedented challenges. As the authorities and institutions react, new measures are being put in place daily. In response to the COVID-19 outbreak, the Chinese government has released a multitude of government directives. The new regulations are aimed to offer assistance as well as guidance to the companies to help them manage labor and employment issues in connection with the pandemic.

During the height of the outbreak in February, the Supreme People’s Court of China ordered courts at all levels to guide litigants to file cases or mediate disputes online, encouraging judges to make full use of online systems for litigation, including those for case filing and ruling delivery, to ensure litigants and their lawyers get better legal services and protection.


The employment authorities and courts will refer to the following principles in hearing labor dispute cases:


  • Balancing protections for both employees and employers. This means not only protecting employees’ rights to make a living and to be employed, but it also means striving to create conditions for employers’ survival and development.
  • Promoting cooperative performance of employment contracts and encouraging parties to negotiate to amend their contracts so as to enable both parties to continue to perform under their employment contracts.
  • Seeking common ground via consultations that seek to resolve labor disputes through mediation and negotiation.
  • Upholding the stability of employment contract relationships, by among other things, denying claims to terminate employment contracts if it is possible for the parties to continue to perform under the contract.


Workplace Safety-

Companies have gradually resumed business operations in Mainland China. The PRC Ministry of Human Resources and Social Security (“MOHRSS”) issued some guidelines on 7 February 2020 on stabilizing employment relations and supporting enterprises’ resumption of work and production during the COVID-19 outbreak. Many provincial and municipal governments have also issued detailed action measures for employers to follow to prevent the spread of disease in the workplace.

Labor issues. Courts are guided

To support employers in their adoption of flexible working hours during the pandemic; and

Not to support employers who seek to terminate employees merely on the grounds that they have been diagnosed with COVID-19, are suspected to be infected with or are an asymptomatic carrier of the virus causing COVID-19, have been quarantined, or are from a COVID-19 hotspot.


Layoffs and termination of employees in China during COVID-19

Under the PRC law, a company may end its employment relationship with an employee by terminating the employee’s employment contract in accordance with the ECL. A company may terminate an employment contract if the employee commits gross misconduct, in which case the company should proactively conduct an investigation to determine if the employee’s misconduct is a terminable offense under company policies and pursuant to the ECL.


If the employee is found to have committed a criminal offense in connection with their refusal to be quarantined or to receive treatment for COVID-19, or for intentionally spreading COVID-19 to endanger the public, or otherwise refusing to cooperate with the government’s disease control measures, the employer may terminate the employment contract in accordance with the ECL.

All the China employers should keep every aspect of the changed law when terminating an employee.

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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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