CBL’s Introduction

China’s Employment Contracts Act, translated here by CBL into American English, treats employment contracts as enforceable legal instruments rather than HR paperwork. Missing written contracts, skipping consultation, or mishandling termination can trigger double pay claims, regulator fines, and court-ordered damages that erase payroll savings. Notably, the law specifies the exact deadlines, wage rules, and renewal procedures businesses in China need to follow to stay compliant and avoid costly disputes or administrative penalties.

This translation was done by the CBL team—if it is helpful to you, please take a moment to learn about our Chinese Legal Translation Services.

 

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Contents

• Ch. 1 Contract Negotiation
• Ch. 2 Contract Execution
• Ch. 3 Performance and Amendment
• Ch. 4 Cancellation and Termination
• Ch. 5 Collective Bargaining, Staffing, and Part-Time Employment
• Ch. 6 Regulatory Oversight and Inspection
• Ch. 7 Liability
• Ch. 8 Validity

Employment Contracts Act of the People’s Republic of China

Employment Contracts Act of the People’s Republic of China

(Adopted June 29, 2007, by the 28th Session of the Standing Committee of the Tenth National People’s Congress; amended December 28, 2012, by the 30th Session of the Standing Committee of the Eleventh National People’s Congress Decision to Amend the PRC Employment Contracts Act)

Chapter 1 General Provisions

Section 1 The purpose of this Act is to improve the employment contracts system, specify the rights and obligations of both employers and employees, protect employee rights, and add stability to employment relationships.

Section 2 This Act shall govern the execution, performance, amendment, termination, and cancellation of employment contracts between business entities, sole proprietorships, and private nonprofit organizations (hereinafter referred to as “Employers”) and their employees within the People’s Republic of China.

This Act shall also govern the execution, performance, amendment, termination, and cancellation of employment contracts between government agencies, public institutions, non-governmental organizations, and their employees.

Section 3 Employment contracts shall be executed in good faith through fair, equal, and voluntary negotiations between employers and employees.

A lawfully executed employment contract shall be binding upon both the employer and employee, and each party shall perform the obligations provided in the contract.

Section 4 An employer shall establish workplace policies that comply with applicable Chinese law, protect employee rights, and ensure that employees perform their assigned job duties.

An employer shall convene a meeting of employee representatives or all employees, present their proposal, solicit and consider employee opinions, and negotiate in good faith with the labor union or employee representatives before adopting or amending any policy or deciding on any significant matter that directly affects employee rights, compensation and benefits, work hours, time off, leave, occupational safety and health, social security, employee training, and defined units of work.

The labor union or employees may object to any matters considered unreasonable and negotiate revisions to any proposed company policies or decisions on significant matters prior to their implementation.

The employer shall publish or notify all employees of each adopted policy or decision on significant matters directly affecting employee rights.

Section 5 County labor regulators and their parent agencies shall establish, improve, and coordinate a regulator-led negotiation system that includes labor unions and employer representatives to analyze and resolve significant issues affecting employment relationships.

Section 6 Labor unions shall assist and guide employees in entering into and performing employment contracts pursuant to law and shall establish collective bargaining processes with employers to protect employee legal rights.

Chapter 2 Execution of Employment Contracts

Section 7 An employment relationship is established between an employer and an employee on the date that the employee begins work. The employers shall create and maintain a list of employees for audit purposes.

Section 8 An employer shall truthfully inform applicants of job responsibilities, working conditions, work location, occupational safety and health conditions and hazards, compensation and benefits, and any other information necessary for applicants to make informed employment decisions. The employer is also entitled to request and obtain personal information from job applicants when such information is directly related to the employment contract, and applicants must provide truthful information as required.

Section 9 An employer shall not unlawfully take possession of an applicant’s identification or other personal documents, nor may it collect a security deposit or any other fees or property from applicants during recruitment for any reason.

Section 10 A written employment contract must be executed upon the establishment of an employment relationship.

If work begins and an employment relationship is established without a written contract, a written employment contract must be executed between the employer and employee within one month of the date the employee begins working.

The employment relationship shall begin on the date the employee begins working if an employer and employee sign an employment contract before the date the employee begins working.

Section 11 Compensation and benefits for a new employee shall be paid pursuant to the applicable collective bargaining agreement if the employer fails to execute a written contract by the date the employee begins work or if the employment contract does not cover compensation and benefits. If there is no collective bargaining agreement in place or it does not cover such matters, compensation and benefits shall be paid on the basis of equal pay for equal work.

Section 12 An employment contract may be fixed-term, indefinite term, or project-based.

Section 13 A fixed-term employment contract is an employment contract in which the employer and employee specify a termination date.

An employer and employee may enter into a fixed-term employment contract through negotiation.

Section 14 An indefinite term employment contract is an employment contract in which the employer and employee do not specify a termination date.

An employer and employee may enter into an indefinite term employment contract through negotiation. Unless the employee requests a fixed-term contract, an employer shall use an indefinite term contract when entering into or renewing employment contracts with an employee who:

(a) Has ten consecutive years of service;

(b) Has ten consecutive years of service and is within ten years of the statutory retirement age when the employer first adopts written employment contracts or when a state-owned enterprise restructures and re-executes the employment contract;

(c) Has completed two consecutive fixed-term contracts and is not subject to §§ 39, 40(a), and 40(b) of this Act.

An employer shall be deemed to have entered into an indefinite employment contract with an employee if they fail to enter into a written employment contract within one year of the date the employee begins work.

Section 15 A project-based employment contract is an employment contract in which the employer and employee specify a termination date based on the completion of the specified project workload.

An employer and employee may negotiate to enter into a project-based employment contract.

Section 16 An employer and employee shall negotiate an employment contract prior to entering into one, and the employment contract shall take effect upon the signature or seal of both parties.

Each employment contract shall be executed in two counterparts, with one counterpart retained by the employer and the other by the employee.

Section 17 An employment contract shall include:

(a) Employer name, work location, and statutory representative or person in charge;

(b) Employee name, address, and resident identification number or other valid identification number;

(c) Contract term;

(d) Job duties and work location;

(e) Work hours and time off;

(f) Compensation and benefits;

(g) Social security contributions;

(h) Worker protections, working conditions, and protections against occupational hazards;

(i) Other terms mandated by applicable Chinese law.

In addition to the mandatory terms above, the employer and employee may agree on other matters such as a probationary period, employee training, confidentiality, supplemental insurance, and benefits.

Section 18 Employers and employees may negotiate to resolve any dispute concerning compensation, benefits, working conditions, or other matters not specified in the employment contract. The applicable collective bargaining agreement shall control if the parties cannot reach an agreement through negotiation. If there is no collective bargaining agreement in place or it does not cover such matters, compensation and benefits shall be paid on the basis of equal pay for equal work, and working conditions shall comply with applicable Chinese law.

Section 19 The length of a probationary period shall not exceed one month for contracts with a term of three to twelve months, two months for contracts with a term of one to three years, or six months for contracts exceeding three years or indefinite term contracts.

An employer may only impose one probationary period on each employee.

An employer may not impose a probationary period in a project-based employment contract or an employment contract with a term of less than three months.

Any probationary period shall be included in and count toward the term of the employment contract. A probationary period shall be void if the term of the employment contract only covers the probationary period, and the stated term shall be treated as the full contract term.

Section 20 An employee‘s wage during the probationary period shall not be lower than the local minimum wage, the employer’s lowest wage for the same position, or 80% of the wage specified in the employment contract.

Section 21 An employer may not terminate an employment contract during an employee’s probationary period except as provided in §§ 39, 40(a), and 40(b) of this Act. The employer is obligated to provide the employee with the reasons for terminating the employment contract during the probationary period.

Section 22 An employer and employee may enter into a written agreement that requires the employee to remain with the employer for a specified retention period if the employer agrees to pay for an employee’s specialized or professional training.

An employee who fails to complete the agreed retention period shall be liable to pay their employer stipulated damages as specified in the written agreement. Stipulated damages shall not exceed the training expenses actually incurred by the employer. An employer may only claim stipulated damages up to the training costs corresponding to the unfulfilled portion of the retention period.

An employer that places an employee on a retention period may adjust the employee’s compensation and benefits for that period pursuant to the applicable compensation adjustment policy.

Section 23 An employer and employee may agree on non-disclosure provisions in the employment contract to protect trade secrets and other intellectual property.

An employer may include a non-compete covenant in an employment contract or nondisclosure agreement with an employee bound by non-disclosure obligations and may agree to pay the employee monthly compensation for the duration of the covenant after the cancellation or termination of the employment contract. An employee who breaches the non-compete covenant shall be liable to pay the stipulated damages specified in their employment contract or nondisclosure agreement.

Section 24 Non-compete provisions may only be imposed on executives, senior technical employees, and other employees subject to non-disclosure obligations. The restricted activities, geographic scope, and duration of any non-compete provisions shall be agreed upon by the employer and employee, and such provisions must comply with applicable Chinese law.

A non-compete restriction shall last no longer than two years following the cancellation or termination of an employee’s employment contract, regardless of whether they join a competitor that produces or manages similar products or provides similar services, or whether they start a competing business.

Section 25 An employment contract between an employer and employee shall not require an employee to pay stipulated damages except as permitted in §§ 22 and 23 of this Act.

Section 26 The following employment contracts shall be deemed partially or fully invalid:

(a) Use of duress to compel a party to enter into or amend an employment contract, through fraud, coercion, or exploitation;

(b) Employment contracts that relieve the employer of their statutory obligations or waive employee rights;

(c) Any employment contract that violates a mandatory provision of applicable Chinese law or administrative regulation.

The jurisdictional labor dispute arbitration organization or court shall resolve any dispute arising from a void employment contract or from any contract provision deemed partially void.

Section 27 The remaining provisions of an employment contract shall remain in full force and effect if any provision is found to be invalid.

Section 28 If an employment contract is deemed invalid after the employee has started work, the employer shall pay the employee all compensation and benefits owed for the work performed. The specific amount of compensation and benefits payable by the employer shall be determined based on the compensation and benefits paid to employees in the same or similar positions.

Chapter 3 Employment Contract Performance and Amendment

Section 29 Employers and employees shall fully perform all obligations under their employment contracts.

Section 30 An employer shall pay their employee all compensation and benefits in full and on time pursuant to the employment contract and applicable Chinese law.

An employee may petition their local court for a payment order if their employer fails to pay compensation or benefits in full and on time, and the court shall issue such an order against the employer pursuant to law.

Section 31 An employer shall strictly comply with established standards for units of work and shall not force or coerce any employee to work overtime. An employer that requires employees to work overtime shall pay overtime compensation pursuant to applicable Chinese law.

Section 32 An employee who refuses to follow illegal instructions or refuses orders to engage in dangerous activities shall not be deemed to have breached their employment contract.

An employee has the right to make complaints, report, or bring claims against an employer for working conditions that endanger their life or health.

Section 33 Any change in the employer’s name, statutory representative, responsible person, or investors shall not affect the performance of the employment contract.

Section 34 The original employment contract shall remain effective if the employer undergoes a merger or spin-off, and the successor employer assumes all rights and obligations under the original contract.

Section 35 Employers and employees may negotiate amendments to an employment contract. Any amendments to an employment contract shall be made in writing.

Amended employment contracts shall be executed in two counterparts, with one counterpart retained by the employer and the other by the employee.

Chapter 4 Cancellation and Termination of Employment Contracts

Section 36 Employers and employees may negotiate the termination of an employment contract.

Section 37 An employee may terminate their employment contract by providing the employer with 30 days’ prior written notice. An employee may terminate their employment contract during the probationary period by giving the employer three days’ written notice.

Section 38 An employee may terminate the employment contract if the employer:

(a) Fails to provide protections or working conditions specified in the employment contract;

(b) Fails to pay compensation and benefits in full and on time;

(c) Fails to pay statutory social security contributions;

(d) Adopts workplace policies that violate applicable Chinese law and infringe upon employee rights;

(e) Enters into an employment contract that is invalid under § 26(a) of this Act;

(f) Anything that entitles an employee to terminate their employment contract under to applicable Chinese law or administrative regulations.

An employee may terminate the employment contract immediately and without prior notice if the employer compels work through violence, threats, or unlawful imprisonment, or if the employer gives illegal instructions or refuses orders to engage in dangerous activities that poses a serious safety hazard.

Section 39 An employer may terminate an employee‘s employment contract if the employee:

(a) Fails to meet position requirements during the probationary period;

(b) Materially violates the employer’s workplace policies;

(c) Grossly negligent in performance of job duties or engages in dishonest conduct for personal gain that causes substantial loss to the employer;

(d) Takes outside employment that materially interferes with the duties assigned by the employer and fails to correct the conflict after notice;

(e) Enters into an employment contract that is invalid under § 26 (a) of this Act;

(f) Is prosecuted for a crime.

Section 40 An employer may terminate an employment contract by giving the employee 30 days’ written notice or by paying the employee one month’s additional wages if:

(a) The employee remains unable to perform either their original duties or alternative work assigned by the employer due to a non-work-related illness or injury after returning from medical leave;

(b) The employee does not meet position requirements even after additional training or reassignment;

(c) A material change in the employer’s business conditions makes continued performance of the contract impracticable, and the parties cannot agree on an amendment to the contract after negotiation.

Section 41 An employer that plans to lay off more than twenty employees or more than ten percent of its workforce under any of the following circumstances may only proceed after explaining reasons for the layoff to the labor union or a meeting of all employees at least 30 in advance, considering their opinions, and file the layoff plan with the labor regulator:

(a) The employer is undergoing court-ordered reorganization under the China Business Bankruptcy Act;

(b) The employer faces major operational difficulties;

(c) The employer still needs to reduce its workforce after product changes, major technical innovations, or significant operational adjustments;

(d) Material changes in the macroeconomic conditions under which the employment contract was executed make continued performance of the employment contract impracticable.

In the event of a layoff, the employer shall preferentially retain employees who:

(a) Have entered into long-term employment contracts with the employer;

(b) Have entered into indefinite term employment contracts with the employer;

(c) Are the sole source of income for their household and have elderly or minor dependents.

An employer that completes a layoff under the first paragraph of § 41 of this Act and later seeks to refill the same positions shall give the terminated employees the right of first refusal to their former positions on the same terms.

Section 42 An employer shall not terminate an employment contract under §§ 40 or 41 of this Act if the employee:

(a) Is exposed to occupational hazards and has not yet received the required occupational medical examination, or may have an occupational illness and is awaiting diagnosis or under medical observation;

(b) Has been diagnosed with an occupational illness or has been found to be partially or fully unable to work due to a work-related injury;

(c) Is on statutory medical leave for a non-work-related illness or injury;

(d) Is a woman during pregnancy, maternity, or nursing;

(e) Has completed fifteen consecutive years of service and will reach the statutory retirement age in less than five years;

(f) Any other circumstance in which applicable Chinese law or administrative regulations require termination.

Section 43 An employer shall give the labor union written notice stating the grounds for termination before terminating an employee. The labor union is entitled to require the employer to correct any action that violates the employment contract, applicable laws, or administrative regulations. The employer shall consider the labor union’s recommendations and provide the union with written notice of its final decision.

Section 44 An employment contract shall terminate automatically when:

(a) The employment contract expires;

(b) The employee begins to receive statutory retirement benefits;

(c) The employee dies or is declared dead or missing by a court;

(d) The employer is declared bankrupt;

(e) The employer’s business license is revoked, the employer is ordered shut down, or the employer winds up its business;

(f) Any other circumstance in which applicable Chinese law or administrative regulations require termination.

Section 45 If an employment contract expires while a circumstance provided in § 42 of this Act is in effect, the employer shall extend the contract term until the circumstance no longer exists. However, any termination of an employee who loses full or partial capacity to work due to an occupational illness or work-related injury under § 42 (b) of this Act must comply with applicable Chinese workers’ compensation laws.

Section 46 An employer shall pay financial compensation to a terminated employee when:

(a) The employee terminates the employment contract pursuant to § 38 of this Act;

(b) The employer and employee agree to terminate the employment contract under § 36 of this Act;

(c) The employer terminates the employment contract pursuant to § 40 of this Act;

(d) The employer terminates the employment contract pursuant to the first paragraph of § 41 of this Act;

(e) A fixed-term employment contract expires under § 44 (a) of this Act and the employer offers renewal on less favorable terms that the employee refuses;

(f) An employment contract is terminated pursuant to § 44 (d) and 44 (e) of this Act;

(g) Any other event provided by applicable Chinese law or administrative regulations.

Section 47 An employee shall receive financial compensation equal to one month’s wages for each year of service. Financial compensation shall be calculated as one month’s wages for an employee with more than six months but less than one year of service, and as half a month’s wages for an employee with less than six months of service.

Financial compensation for an employee whose monthly wage exceeds three times the local monthly average shall be calculated on the basis of a monthly wage equal to three times the local average monthly wage for the previous calendar year, as published by the municipal or home rule city government with jurisdiction over the employer. The maximum service period compensable shall not exceed 12 years.

“Monthly wages” as used in this section means the employee’s average monthly wages during the twelve months preceding termination or cancellation of the employment contract.

Section 48 An employer that terminates or cancels an employment contract in violation of this Act shall reinstate the employee upon request. The employer shall pay financial compensation pursuant to § 87 of this Act if the employee does not request reinstatement or such reinstatement is impracticable.

Section 49 The central government shall establish and maintain procedures for transferring and continuing employee social security records across jurisdictions.

Section 50 An employer shall issue written proof of the termination or cancellation of an employment contract and transfer the employee‘s personnel file and social security records within 15 days of such termination or cancellation.

The employee shall complete any handover provided for by their agreement. The employer shall pay any financial compensation due under this Act once handover is completed.

The employer shall retain the terminated or canceled employment contract for a minimum of two years for audit purposes.

Chapter 5 Specific Provisions

Article 1 Collective Bargaining Contracts

Section 51 An employer and its employees may negotiate and enter into collective bargaining contracts addressing matters including compensation and benefits, work hours, time off, leave, occupational safety and health, and social security. Draft collective bargaining contracts shall be submitted to a meeting of all employees or employee representatives for discussion and approval.

An employer may execute a collective bargaining contract with the labor union representing its employees. If no labor union represents the employees, the employer may execute an agreement with employee representatives elected under the supervision of what would be the parent labor union.

Section 52 An employer and its employees may enter into collective bargaining agreements addressing specific matters, including occupational safety and health, protections for women employees, and policies for adjusting compensation.

Section 53 County labor unions and their component unions in the construction, mining, and food-service industries may execute industry or local collective bargaining agreements with the appropriate industry employer representatives.

Section 54 An executed collective bargaining agreement shall be filed with the labor regulator. The agreement shall take effect 15 days after filing unless the labor regulator objects.

A lawfully executed collective bargaining agreement is binding upon the employer and all employees covered by the agreement. An industry or local collective bargaining agreement is binding on every employer and employee within the industry or area specified in the agreement.

Section 55 The compensation, benefits, and working conditions provided in a collective bargaining agreement shall not be lower than minimum standards set by the local government. The compensation, benefits, and working conditions in an individual employment contract shall not be lower than the standards in the applicable collective bargaining agreement.

Section 56 A labor union is entitled to hold an employer liable for any breach of a collective bargaining agreement or violation of employee rights. The labor union may submit any dispute arising from the performance of a collective bargaining agreement that cannot be resolved through negotiation for arbitration or initiate a civil action pursuant to law.

Article 2 Staffing

Section 57 Operating a temporary staffing agency requires:

(a) A minimum registered capital of 2,000,000 yuan;

(b) A fixed business address and appropriate facilities for conducting business;

(c) A temporary staffing management system that complies with applicable Chinese laws and administrative regulations; and

(d) Other requirements specified in applicable laws and administrative regulations.

A staffing agency must obtain regulatory approval pursuant to applicable law and may operate only after it receives the appropriate license. A licensed staffing agency shall register the business as required by law.

An entity or individual shall not operate a temporary staffing agency without license.

A staffing client shall comply with equal pay for equal work requirements and provide temporary workers the same compensation and benefits it provides to its employees who perform the same duties.

Compensation and benefits for a temporary worker shall comply with the preceding paragraph and shall be specified in both the employment contract between the staffing agency and the temporary worker, and the staffing agreement between the staffing agency and the staffing client.

Section 58 A staffing agency is an employer under this Act and must fulfill all statutory obligations owed by an employer to its employees. An employment contract executed between a staffing agency and a temporary worker shall include the terms provided in § 17 of this Act, the name of the staffing client, the staffing term, and the position to be filled.

A staffing agency shall enter into a fixed-term employment contract of at least two years with each temporary worker. The staffing agency shall pay compensation and benefits on a monthly basis and shall pay no less than the local minimum monthly wage during any period the worker is awaiting reassignment.

Section 59 A staffing agency shall execute a staffing agreement with the client employer (hereafter “staffing client”) before assigning any temporary worker. The staffing agreement shall specify the number of positions to be filled and persons assigned, the amount and payment method of compensation and benefits, staffing client social security obligations, and liability for breach of contract.

The staffing term agreed between the staffing agency and staffing client shall reflect the staffing client’s actual operational needs and may not be divided into successive short-term staffing agreements.

Section 60 A staffing agency must notify a temporary worker of the terms of the staffing agreement.

A staffing agency may not make any unlawful deductions from the compensation and benefits paid to a temporary worker under the staffing agreement.

Neither a staffing agency nor its staffing client may charge a temporary worker any fees.

Section 61 A temporary worker assigned by a staffing agency to a staffing client in another jurisdiction shall receive compensation, benefits, and working conditions that meet or exceed the local standards in effect at the staffing client’s location.

Section 62 A staffing client has the following obligations:

(a) Comply with Chinese labor standards and provide appropriate working conditions and worker protections;

(b) Inform temporary workers of their duties, compensation, and benefits in writing;

(c) Pay overtime wages, performance bonuses, and provide benefits appropriate to the position;

(d) Provide temporary workers with the necessary job training for their positions;

(e) Adjust worker compensation as required by applicable compensation adjustment policies when retaining temporary workers beyond the initial assignment.

A staffing client shall not reassign a temporary worker to another employer.

Section 63 A temporary worker shall receive compensation and benefits equal to those provided to the staffing client’s employees who perform the same duties. If a staffing client has no employees in the same position, the temporary worker shall receive compensation and benefits equal to those provided for similar positions in the staffing client’s location.

Section 64 A temporary worker may lawfully join or form a labor union within the staffing agency or at the staffing client to protect their rights.

Section 65 A temporary worker may terminate their employment contract with the staffing agency pursuant to §§ 36 and 38 of this Act.

A staffing client may discharge a temporary worker under §§ 39, 40 (a), and 40 (b) of this Act. Upon the worker’s discharge, the staffing agency may terminate the employment contract pursuant to this Act.

Section 66 An employer in China shall use employment contracts as the standard form of employment.

An employer may use temporary workers only to supplement staffing in temporary, non-core, or auxiliary positions.

“Temporary positions” are those lasting a maximum of 6 months; “non-core positions” are positions unrelated to the staffing client‘s main business; and “auxiliary positions” are positions intended to be temporarily filled while regular employees are unable to work due to reasons such as education or vacation.

A staffing client shall strictly limit the number of temporary workers to no more than the percentage of its total workforce specified by the cabinet-level labor regulator.

Section 67 An employer shall not form a staffing agency to assign workers to their own company or their affiliates.

Article 3 Part-time Employment

Section 68 “Part-time employment” means the arrangement in which an employee is paid by the hour and works on average fewer than four hours per day and no more than twenty-four hours per week for the same employer.

Section 69 An employer and an employee may enter into a verbal agreement establishing a part-time employment relationship.

A part-time employee may enter into employment contracts with multiple employers, and a later contract shall not interfere with the performance of an earlier employment contract.

Section 70 A part-time employment contract may not include a probationary period.

Section 71 A party to a part-time employment contract may terminate the employment at any time by giving notice to the other party. The employer shall not be obligated to pay financial compensation to the employee upon termination of the employment.

Section 72 Hourly wages for a part-time employee shall not be lower than the minimum hourly wage set by the local government at the staffing client‘s location.

The maximum pay period for part-time employees shall not exceed 15 days.

Chapter 6 Oversight and Inspection

Section 73 The labor regulator designated by the State Council shall oversee and administer compliance with employment contracts nationwide.

County labor regulators and their parent agencies shall oversee and administer compliance with employment contracts within their jurisdictions.

A county labor regulator or its parent agency shall consider the opinions of labor unions, employer representatives, and the appropriate industry regulators when overseeing and enforcing compliance with employment contracts.

Section 73 The county labor regulator or its parent agency shall oversee and administer the following matters while enforcing compliance with employment contracts pursuant to law:

(a) Employer workplace policies that directly affect employee rights and their realization;

(b) Execution and termination of employment contracts between employers and employees;

(c) Compliance by staffing clients and staffing agencies with applicable temporary staffing rules;

(d) Employer compliance with Chinese law on employee work hours, time off, and leave;

(e) Employer compliance with compensation under the employment contract and minimum wage standards;

(f) Employer enrollment in social security and payment of required social security contributions;

(g) Any other oversight obligations required under the law.

Section 75 The county labor regulator and its parent agency are entitled to review materials related to employment contracts and collective bargaining agreements and inspect workplaces as part of their enforcement. Employers and employees must provide complete and accurate information and documents upon request.

Labor regulator staff shall present official credentials and carry out their duties pursuant to law, and enforce the law consistent with social norms.

Section 76 The county jurisdictional agencies responsible for construction, public health, and occupational safety and health, and their parent agencies shall oversee and enforce employer compliance with employment contract requirements.

Section 77 An employee whose rights are violated may request assistance from the appropriate agency, file for labor arbitration, or bring a civil action pursuant to law.

Section 78 A labor union shall protect employee rights pursuant to law and oversee employer compliance with employment contracts or collective bargaining agreements. A labor union may challenge any employer practice that violates Chinese employment law or breaches an employment contract or collective bargaining contract and shall assist any affected employees throughout any resulting arbitration and litigation proceedings.

Section 79 Any organization or individual may report a violation of this Act. The county labor regulator or its parent agency shall investigate each report, address any confirmed violation, and reward those whose report leads to a verified violation.

Chapter 7 Liability

Section 80 A labor regulator shall order an employer whose workplace policies directly affect employee rights and violate applicable Chinese law to correct the violation and shall issue a warning. The employer shall indemnify employees for any losses resulting from the violation.

Section 81 A labor regulator shall order an employer that omits the mandatory terms required by this Act from an employment contract or fails to execute a written contract with any employee to correct their violation. The employer shall be liable to pay damages to employees for any losses caused by the violation.

Section 82 An employer that fails to execute a written employment contract within one month after the employee begins work shall be liable to pay the employee twice their monthly wages.

An employer that fails to execute an indefinite employment contract when required by this Act shall be liable to pay the employee stipulated damages equal to twice the employee’s monthly wage for each month after the date the contract should have been executed.

Section 83 An employer that imposes a probationary period exceeding the limit set by this act shall be ordered by the labor regulator to amend the contract to comply with the limit. If an employee has already completed a probationary period beyond the lawful limit, the employer shall pay that employee an additional month of wages calculated at the post-probation rate for each month worked beyond the permitted period.

Section 84 The labor regulator shall order any employer that unlawfully takes possession of an employee‘s identification card or other personal documents to return such documents within a specified deadline and shall impose penalties on the employer pursuant to applicable Chinese law.

An employer that improperly charges a fee, collects a security deposit, or takes property from an employee shall be ordered by the labor regulator to return the fee, deposit, or property within a specified deadline and pay a fine of 500 to 2,000 yuan for each affected employee. The employer shall be liable for any losses suffered by such employees.

An employer that unlawfully retains an employee’s personnel file or other personal property when the employee lawfully terminates or cancels the employment contract shall be subject to the penalties under this Section.

Section 85 The labor regulator shall order an employer to pay any outstanding compensation and benefits, overtime wages, or financial compensation within a specified deadline under any of the following circumstances and, where necessary, require the employer to make up any difference between the employee‘s wages and the local minimum wage. An employer that fails to pay within the deadline shall pay damages equal to 50 percent to 100 percent of the overdue amount:

(a) The employer fails to pay compensation and benefits in full and on time as required by the employment contract or Chinese law;

(b) The wages paid are lower than the local minimum wage;

(c) The employer fails to pay overtime wages after assigning overtime work;

(d) The employer has not paid the financial compensation required under this Act upon termination or cancellation of the employment contract.

Section 86 A party that causes an employment contract to be invalidated under § 26 of this Act shall pay damages to the other party for any loss resulting from the invalid contract.

Section 87 An employer that unlawfully terminates or cancels an employment contract shall pay damages equal to twice the financial compensation owed under § 47 of this Act.

Section 88 An employer that engages in any of the following acts shall be subject to administrative penalties, criminal prosecution where applicable, and must indemnify employees for resulting losses:

(a) Compelling work through violence, threats, or unlawful imprisonment;

(b) Issuing unlawful instructions or assigning dangerous activities that create a serious safety hazard;

(c) Humiliating employees, imposing corporal punishment, beating, conducting unlawful searches, or holding employees against their will;

(d) Subjecting employees to harsh working conditions or exposing employees to environmental pollution that significantly endangers their physical or mental health.

Section 89 The labor regulator shall order an employer that fails to provide an employee with a written record of the termination or cancellation of the employment contract as required by this Act to correct the violation. The employer shall indemnify the employee for any losses caused by the violation.

Section 90 An employee who terminates an employment contract in violation of this Act or breaches any non-disclosure or non-compete obligations in the employment contract shall pay damages to the employer for all losses arising from the breach.

Section 91 An employer that hires a worker who has not lawfully terminated or canceled an existing employment contract with a former employer shall be jointly and severally liable with the worker for any losses suffered by the former employer.

Section 92 The labor regulator shall order a staffing agency operating without a license in violation of this Act to cease and desist, disgorge all unlawful income, and pay a penalty of one to five times the amount of unlawful income. If no unlawful income is obtained, the regulator shall impose a penalty of up to 50,000 yuan.

The labor regulator shall order a staffing agency or staffing client that violates this Act to correct the violation by a specified deadline. If the violator fails to correct by the deadline, the labor regulator shall impose a penalty of 5,000 to 10,000 yuan for each temporary worker affected. The labor regulator shall revoke the license of any staffing agency that operates in violation of this act.

The temporary staffing agency and the staffing client shall be jointly and severally liable to each affected temporary worker for losses caused by the violation.

Section 93 An employer operating without appropriate qualification to do business that commits a crime shall be prosecuted to the full extent of the law. If an employee has commenced work, the employer or its investors shall be liable to pay the employee compensation and benefits for their work, pay damages, and pay financial compensation pursuant to this Act. The employer shall pay damages to the employee for any losses caused by the violation.

Section 94 If a natural person independent contractor hires employees in violation of this Act, the organization contracting with the independent contractor shall be jointly and severally liable for any losses caused to employees.

Section 95 The labor regulator, any other agency with jurisdiction, and their employees shall be liable for losses suffered by an employee or employer if such losses result from negligence, failure to perform a legal duty, or unlawful use of authority. Directors and other employees who are directly responsible shall be subject to administrative penalties and criminal prosecution when the conduct constitutes a crime.

Chapter 8 Miscellaneous

Section 96 An employment contract between a public institution and an employee shall be governed by the provisions on execution, performance, amendment, or termination in applicable laws, administrative regulations, or State Council rules. If no specific provisions are provided, the contract shall be governed by this Act.

Section 97 An employment contract lawfully executed before this Act takes effect and still in force on that date shall remain valid. For the purposes of § 14 (b)(3), the number of consecutive employment contract renewals shall be calculated from the first renewal made after the effective date of this Act.

An employer and employee must enter into a written employment contract within one month of the effective date of this Act if the employment relationship began before the date this Act takes effect.

An employment contract lawfully executed before the effective date of this Act and terminated or canceled after that date entitles the employee to financial compensation under § 46 of this Act, calculated on service accrued from the effective date. Any financial compensation required under rules applicable before the Act took effect shall be paid pursuant to those rules.

Section 98 This Act shall take effect on January 1, 2008.

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This act was translated to American English from the following government publication:

“中华人民共和国劳动合同法”

https://flk.npc.gov.cn/detail?id=2c909fdd678bf17901678bf74d7106b3&fileId=&type=&title=中华人民共和国劳动合同法