In Chinese labor law, working conditions includes the equipment and environment necessary for work, for example a factory building with lighting, ventilation, safety equipment, ventilation, and restrooms. These are both physical and psychological conditions, and can include both means of production and ordinary quality of life provisions. Chinese labor policy is rooted in Marxism, which sees poor working conditions as a means to exploit and oppress workers.

Regulators thus expect that employers will try to suppress wages and provide a poor working environment in order to maximize profits, and only people’s labor movements can improve these conditions. Therefore, under the Employment Contracts Act, an employee may terminate their contract and demand severance payment as compensation should working conditions fail to satisfy regulatory requirements.