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Written Agreements

A written labor agreement is mandatory and must be formed at the establishment of an employment relationship, which is the date when the employee begins working. If the employment relationship is already established, the written contract must be formed within one month from the date when the employee starts to work.

Both the employer and the employee must have one copy of the labor contract written in Chinese as well as any relevant foreign language. The written agreement must include the following information:

• The employer's name, domicile, legal representative, or major person-in-charge
• The employee's name, domicile, and ID card number or another valid identity document
• Term of the contract
• Job description and place of work
• Working hours, break time and leave
• Remuneration
• Social security
• Labor protection, working conditions, and protection against occupational hazards
• Liability for breach of contract

Oral Agreements

China's law allows the use of oral contracts. However, for full-time employees, a written agreement must be formed within 1 month from the date when the employee begins work.

The law indicates that part-time employees may conclude an oral agreement. A part-time employee who works up to 24 cumulative hours per week and 4 hours per day, on average, is subject to different requirements and may be employed under an oral contract.

Implied Agreements

Under the Labor Contract Law of China, certain legal requirements are implied in the employment relationship, irrespective of whether or not they are covered in the written contract, including (but not limited to):

• Grounds for employment termination
• Minimum wages
• Calculation of statutory severance

Under the Labor Law of China, employees cannot work more than 8 hours a day and 44 hours a week, on average.

Employers can extend working hours by 1 hour per day after consulting with the relevant trade union and employees due to production needs or business operation requirements. However, extended hours may reach up to 3 hours per day if the extension is needed for particular reasons, and the health of employees is guaranteed. The total extension in a month cannot go over 36 hours.

New Year (1), Chinese New Year (3), Tomb Sweeping Day (1), Labor Day (1), Dragon Boat Day (1), Mid- Autumn Day (1), and National Day (3).

Per the Labor Contract Law, an employer can only impose one probation period on an employee. Probationary periods range from 1 to 6 months, depending on the length of the employment contract. A probation period may not be established for a labor contract that ends at the completion of a specific task or a fixed term of fewer than 3 months.

Notice Period

In China, employees can unilaterally terminate their employment contract by giving a written notice 30 days in advance (3 days in advance during the probationary period). Similarly, an employer can unilaterally terminate an employment contract by giving a written notice 30 days in advance or providing 1 month’s salary in lieu of notice if the employer and employee meet certain prescribed criteria in the labor code.

Severance Benefits

Severance pay is based on the number of years an employee has worked for the employer: 1 month's wages for every year of service. For employees who have worked for more than 6 months but less than 1 year, the severance pay is calculated based on 1 year. For the duration of employment under 6 months, the severance pay is half of a monthly salary. The maximum period for which severance is paid to it shall not exceed 12 years.

If the monthly salary of the laborer is higher than 3 times the local average monthly salary of the place where the employing unit is located, the economic compensation paid to them is paid according to the amount of 3 times the local average monthly salary.

Minimum Wage

There is no national minimum wage rate in China. Each of the country's autonomous regions, provinces, and direct-controlled municipalities sets minimum wage rates for its territory. Most provinces set different classes of minimum wages in different districts, depending on the district's level of development and cost of living. Some jurisdictions adjust minimum wage rates every year or every 6 months, although other jurisdictions adjust minimum wage rates less frequently.

For example, Shanghai's monthly minimum wage for full-time employees is CNY 2,690 (Chinese yuan), while the hourly minimum wage for part-time employees is CNY 24.

Overtime, Holiday & Vacation Pay

China's labor code requires employers to pay overtime compensation as follows:

• Employers must pay no less than 150% of employees' regular wages for extended working hours (generally defined as more than eight hours daily or 44 hours weekly).
• Employers must pay no less than 200% of regular wages if overtime work occurs on rest days, and no make-up rest days can be arranged.
• Employers must pay no less than 300% of the regular wages if work is arranged on statutory holidays.

Overtime work cannot exceed 36 hours in a month and is authorized only for production needs or business operation requirements or emergencies.

Visas

Foreign nationals from most countries require a visa to enter and stay in China. Travelers from Singapore, Brunei, and Japan are allowed visa-free entry for up to 15 days for tourism or personal visits. If a stay goes beyond the duration of a visa, an extension is required. A renewal application must be submitted at least seven days before the expiration of the current visa. It must include a valid passport, current visa as well as the reason for the extension. The length of the extension depends on the type of visa requested (for example, multiple entry visas may not be extended).

According to the State Council of China, visa categories include Tourist (L), Business (F/M), Student (X), Resident (D), Talent (R), Private Visit (S), Family Reunion (Q), Transit (G), Crew (C), and Journalist (J-1, J-2).

Work Permits

Foreign employees require an employment license (submitted by employer) before obtaining a work permit. Applications for work permits may be obtained at embassies and consulates and must meet the following requirements:

• Z visas obtained prior to arrival
• Applications need to be sponsored and submitted by a locally registered company in China.
• Expats need to live and work in the same location as their sponsoring company.
• Medical examinations from authorized hospitals (foreign or domestic)

Beijing requires foreign employees to have a non-criminal background check approved by Chinese authorities. In Shanghai, the medical examination may be obtained after receiving the Z visa and work permit. Employees apply for a work permit at their local labor bureau after arriving in China.

Work permits usually have a term of 1 year and never exceed five years unless certain conditions are satisfied. If the duration of a work permit exceeds 1 year, the employer must apply to the government for an annual check of the work permit at least 30 days before the term reaches a full year.