The rules that matter most
Written contracts
Sign a written employment contract within one month of the start date. After that, the employer owes double wages until it’s signed, and after a year without one the employee is treated as having an open-ended contract.
Probation
Probation length is capped by contract length, up to six months for contracts of three years or more. Probationary pay must be at least 80% of the agreed wage and not below the local minimum wage.
Fixed-term and open-ended contracts
After two consecutive fixed-term contracts (or 10 years’ service), the employee can generally insist on an open-ended contract.
Social insurance and housing fund
Employers must enrol staff and contribute to pension, medical, unemployment, work-injury and maternity insurance, plus the housing fund. Rates vary by city; see payroll.
Ending employment
Dismissals are only lawful on the grounds listed in the Labor Contract Law, such as serious misconduct, proven incompetence after training or reassignment, or major changes in circumstances. Wrongful termination usually costs double the statutory severance. See severance pay in China.
The employee handbook
Rules on attendance, discipline and conduct are only enforceable if they’re reasonable and adopted through the proper consultation process and communicated to staff. A good handbook is the basis for any later disciplinary action.
Our employment team drafts contracts and handbooks and advises on terminations.