Chinese labour law
The Labour Contract Law, which covers all workers in China, changed on January 1, 2008 in an effort to address the rising number of labour disputes. The law requires that employment contracts must be put in writing within one month of employment commencing, and gives clear recourse to employees whose rights have been violated. It covers areas such as severance pay, probationary periods, lay-offs, non-compete clauses and collective bargaining. An English translation of the law can be found on the section of Chinese Law on our website. This link will directly lead you:
Labour Law of the People's Republic of China (中华人民共和国劳动法)
- According to Chinese labour law, the standard working time is 40 hours per week. In theory, the standard work week in China runs from Monday to Friday from 9:00 am to 6:00 pm, but in reality, overtime is the norm and most local companies don’t compensate their workers for it.
- All workers in China are entitled to three national holidays, each stretching into a week of vacation: Chinese New Year (usually in late January or late February), International Labour Day (first week of May) and National Day (first week of October). While employees get the week off, the government mandates that workers "make up" for the holiday by working through the previous weekend (resulting in only three days off). In any case, you should ensure that your holidays are stated in your employment contract.
- If you are badly treated at work, you should first complain to your personnel department, preferably in writing, with evidence to back your case. If there is subsequently no change then it could be time to speak to a lawyer. Try to find a reliable Chinese lawyer, as they will be familiar with the local regulations.
- If your company wants to fire you for any reason, they should give you one month’s notice, first providing verbal and written warnings in cases of alleged misconduct.
Other things you should know about Chinese labour law
Contracts are not seen as binding in China as they are in other countries.
Try to get a clear statement on the length of your employment in your contract, including any probation periods. If your contract is for a year or less, the probation period should only be one month long.
You should check salary details, payment dates and currency you’re paid in, taxes that will be deducted from your pay, the terms of overtime work and holiday policies. Also make sure that any ‘extras’ such as housing, travel expenses and mobile phone costs are stated in your employment contract.
Check in advance on what terms you can leave your job, and the company’s procedure if it decides to terminate your employment. For maternity leave, the law in China states that women 25 years and older are entitled to four months off work after giving birth. If you’re under 25, you’re only entitled to three months.
Employment packages for expatriates in China
Your employment package will depend on whether you are hired as an expat from abroad or locally. If you are employed from oversees, you can expect a salary according to Western European or US-standards and a full range of benefits.
Salaries depend on your position and your industry, but many expatriate salaries in China range from US$ 25,000 – 100,000 per year. Benefits often include standard bonuses, housing allowance, 3-5 weeks paid vacation, a round trip air ticket once a year, full Western standard healthcare, evacuation insurance, tax coverage, coverage of shipping fees and all other expenses and training that you will need as an employee. Sometimes language lessons are also paid for. In high-level positions, you will often get a mobile phone and a car and/or driver, or at least have travel to and from work reimbursed.
Local expat hires
If you’re hired locally in China, the picture changes significantly. and you will receive just a fraction of the package that you could expect when being sent to China from a company back home. As an expatriate, you will often get better conditions than your Chinese colleagues, but even so you might not reach the level of benefits that you’ve been accustomed to at home.
Typical business salaries for local expatriate hires run between US$ 15,000 and 50,000 per year, although they can get higher if you bring significant experience to the company employing you. Salaries for medium-level positions such as translators or assistants range from US$ 15,000 to 30,000 per year. Teaching English is well paid for – at least by Chinese standards - with salaries for foreign English teachers ranging from US$ 5,000 to 15,000 per year. The exact payment depends very much on your teaching position.
Employment benefits in China
Besides the salary itself, the extra benefits that you receive as a local expat worker in China can be just as important. Some expat packages don't include any housing; others will provide you with an allowance of up to US$1500 per month. Only very few local hire expat jobs will provide you with an apartment - you'll have to find one on your own otherwise.
- Healthcare: When working in China, you will certainly want a foreign healthcare package and an evacuation service. If this is included in your employment contract, it adds another US$ 200 per month to your total benefits.
- Vacations: Standard vacations for locally hired expatriates are 3-4 weeks of paid vacation per year. If you get lucky, your vacation package will also include a yearly return flight to your home country.
- Visas: Your Company should handle all tasks related to your visa. If you are lucky, they may send you to Hong Kong every 3-6 months to get a new visa. So not only will you have the chance to visit Hong Kong but it will also help you avoid taxes in China. Visas are a major headache if your company refuses to handle them on your behalf, so insist that they manage your visa and all related work permits.
- Bonuses and raises: Standard bonuses are a month salary or less. Standard raises vary from year to year, but are normally between 5-15%.