Signing a labor contract in China requires strict adherence to PRC laws and regulations [for more info click this linkE-commerce English (website)]. Unlike commercial contracts, the applicable law cannot be chosen. In this brief article, we highlight some of the main aspects to consider when drafting an employment agreement.
Parties: The employer must be a Chinese entity. Foreign entities, including those from Hong Kong, Taiwan, and Macau, cannot directly hire personnel in China. The employee must meet all legal requirements for employment, including the legal age, not being employed elsewhere at the time of hiring, and obtaining the necessary authorizations and permits for legal employment in China.
Language: The Chinese language is required for the contract. While a bilingual contract is permissible, the non-Chinese version is considered for reference only.
Term: A labor contract can be open-ended, fixed-term, or project-based, depending on whether it has a predetermined expiration date or ends upon completion of a specific task or project.
Probation: The probation period varies based on the years of employment set in the contract, with a maximum of 6 months.
Duties and Rights of the Parties: It’s recommended to specify in detail all duties and rights of the parties within the contract to minimize the risk of disputes.
Termination: The cases for early termination of an employment agreement are strictly regulated by law and cannot be modified by the parties. It’s crucial to carefully evaluate these cases before stipulating your labor contract.
Optional Clauses: The law allows for the inclusion of optional provisions such as confidentiality, non-competition, and training clauses. If you require these aspects in your employment relationship, ensure that the relevant clauses fully comply with the law.
Internal Rules: The employer’s internal rules, if any, are integral to the labor contract. Ensure that the employee is aware of these rules and accepts their content for them to be fully effective.
