Hire in China

EOR in China

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in China, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in China ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in China and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in China

The central employment-related law in China is the Labor Law passed in 1994. Various national laws and local rules cover employment contracts, benefits, social insurance, gender issues, and trade unions. 

The Labor Contract Law of 2008 tightened the rules governing employment agreements to promote workers’ rights, and the government has taken some steps toward promoting collective bargaining and providing an explicit right to strike. Employers must enter into a written employment contract with each employee.  

Employment contracts in China

As you look to hire employees in China, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The standard workweek in China is eight hours per day, 40 hours per week. Employees are entitled to at least one full day off each week, although most employers provide two days, usually Saturday and Sunday.

Employers may extend working hours if they consult the employees and labor union if one exists. In general, the workday cannot be extended by more than one hour per day, with three-hour extensions permitted in certain circumstances.

For special positions that don’t fit within standard eight-hour days, an employer can adopt a flexible system for employees including high-ranking managerial staff, sales staff, field personnel, security personnel, and others if they secure the approval of the proper labor administration authority.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind: 

• Six Chinese jurisdictions increased their monthly and hourly minimum wages from 2024 onwards, they are:  
• Employers must publicly inform employees of any new minimum wage rate applicable to them within 10 days of the date it was issued by the government that established it. 
• There is a monthly minimum wage for full-time employees and an hourly minimum wage for part-time employees. 
• Shanghai has the highest monthly minimum wage among 31 provinces (RMB 2,590 per month) and Beijing has the highest hourly minimum wage (RMB 25.3 per hour). 
• Overtime cannot exceed 36 hours per month unless there is a natural disaster or similar event that endangers lives. 
• Overtime compensation is as follows:  

As your employer of record in China, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Many companies in China offer a 13th-month salary payment during the month of the Chinese New Year or Spring Holiday, but it is not required by law.

Probationary period

Employers can include a probationary period if a contract runs for at least three months. The maximum length of probation depends on the length of the contract:  

• Contracts lasting three months to less than one year: One-month maximum probationary period 
• Contracts lasting one year to less than three years: Two-month maximum 
• Contracts lasting three or more years: Six-month maximum

Termination and severance

Employment contracts can be terminated by mutual consent, during a probationary period, or for various other reasons.

Severance pay is one month's salary for each full year of work plus a half month's salary for a partial year of work less than six months or a full month's salary for a partial year of work of six months or more.

For workers whose salary is more than three times the monthly average in the locality where they work, severance is calculated for a maximum of 12 months and is limited to three times the monthly average (rather than their wage).

The law requires 30 days' notice—or payment of one month’s wages in lieu of notice—as well as severance pay to certain employees.

Employers are required to notify labor unions of any proposed unilateral termination. The union may demand that an employer correct an action if it violates the law or the terms of a labor contract.

Employee benefits and paid leave in China

When negotiating terms of an employment contract with a candidate in China, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Employers are required to offer maternity leave. The national requirement is at least 98 days.

After China abandoned its one-child policy, localities lengthened the amount of maternity leave they require. The length of leave varies from place to place, in the Hainan and Henan provinces, maternity leave has been increased to 190 days, and in Beijing and Shanghai, women may take 158 days of maternity leave.

Leave can be extended between one and three additional months, depending on the region, if the employer agrees to it.

Employees receive a maternity allowance while they are on leave. The amount is based on the insurance policy their employer must hold for them, which is based on their salary.

The Social Security Bureau pays the employee and in some places, the employer must also pay the employee.

Employers cannot require overtime or night shifts for employees over seven months pregnant or nursing, and pregnant or nursing employees cannot be terminated.

Vacation

Employees who have worked continuously for more than one year are entitled to paid vacation. The amount of paid leave depends on the total number of years they have worked—not just their years with their current employer.  

• At least one but less than 10 total work years: Five days of annual leave 
• 10 years to less than 20 years: 10 days 
• 20 years or more: 15 days 

Unused annual leave may be carried over to the next year.

Employers who want to cancel annual leave because of production or work requirements must get the consent of their employees and must also pay 300% of each employee’s daily wages for each day of annual leave that is accrued but unused.

Holidays

Employees are entitled to the following national holidays, the dates of some of which vary year to year depending on the lunar calendar: 

• New Year’s Day 
• Spring Festival (three days) 
• Tomb Sweeping Day  
• International Labor Day 
• Dragon Boat Festival  
• Mid-Autumn Festival 
• National Day (three days) 

Female employees are also entitled to a half day of paid leave on International Women’s Day, which falls on March 8.

The government provides additional public holidays to create long holiday weeks called Golden Weeks during the Spring Festival and National Day.

Sick leave

Depending on the employee's total years of work experience, tenure with the current employer, and local regulations, sick leave must be granted between 3 and 24 months for non-work-related illnesses and injuries.

Compensation also varies by location. It can be calculated in a variety of ways: 

• Based on the employee’s salary and work experience 
• Based exclusively on salary  
• According to the employment contract 

Generally, the amount of compensation must be at least 80% of the minimum monthly salary as determined by the local government.

Health coverage

China’s medical insurance system consists of a pooled fund and personal accounts. Employers contribute 8 to 10% of payroll depending on the province within which they are located, and employees contribute 2% of income. Employee contributions are deposited into personal accounts along with approximately 30% of employer contributions. The rest of the employer contributions goes into the pooled fund. Employees may use medical insurance funds when seeing a doctor or purchasing medicines at designated hospitals and pharmacies.

Additional benefits

In addition to healthcare benefits, employees in China are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in China, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: February 07, 2024 

Employee onboarding with an employer of record in China

We write and validate all local employment contracts, streamlining the onboarding process for you and your China employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in China, we will:   

• Schedule a welcome call to discuss HR and employment information for China, as well as answer any questions 
• Prepare a customized employment contract in English or other local language 
• Share the employment contract and benefits information with the new employee for signature and review 
• Gather tax and banking information from the employee to set up payroll 
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll 

The entire onboarding process for the employee is often completed in as little as two weeks. 

Partner with Safeguard Global as your China employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in China. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today. 

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.