Hiring employees in China requires a sophisticated legal risk management process because workers’ rights are highly regulated in the country. An employer needs to obtain a wide variety of specific documentation in order to retain their right to terminate an unsuitable employee, but at the same time collecting certain kinds of information is prohibited by equal opportunity and employee privacy laws. During a probationary period, a newly hired employee enjoys a wide variety of rights but may be terminated through a specific process if it is determined that they do not meet job requirements documented during the hiring process.
This official government guidance, translated by CBL using the user-centered approach, was written by China’s labor regulator, the Ministry of Human Resources and Social Security.
Contents
Recruitment Process
When hiring employees in China, ensure that job descriptions are clear and transparent, outlining specific expectations while ensuring these are non-discriminatory.
A position description should contain job requirements that are specific, measurable, and attainable, avoiding ambiguity or abstract phrasing. For example, avoid stating that the candidate should be “capable and proactive,” because that is too vague. Instead, use measurable factors that can be objectively evaluated. In cases where it may be difficult to determine if a candidate is actually qualified before they start work, use reference standards to establish objective grounds for termination if the need arises.
Provide candidates with all job requirements in writing during recruitment and have them sign to acknowledge receipt of the materials. Candidates should be fully informed of how they will be managed and assessed, and what their working conditions are. You will need this documentation to lawfully terminate an unqualified employee during the probationary period without being liable for severance.
Do not include discriminatory content in job postings, as Chinese law guarantees equal employment opportunity regardless of ethnicity, race, gender, religion, or place of origin.
You may not refuse to hire a person on the basis of gender or disability status, except as provided by specific regulations, such as the list of jobs deemed hazardous to women. If hiring migrant workers, persons with rural household registration must be treated equally to those with urban household registration.
You may not refuse to hire someone because they are chronically unemployed. Additionally, you may not refuse to hire a carrier of an infectious disease unless they lack a medical evaluation confirming that they do not pose a risk of transmission to others or they are applying for a position that the law prohibits for carriers of the disease.
Overall, clear communication of job requirements and compliance with discrimination laws can minimize your legal risks when hiring in China.
Interviewing Candidates
When hiring, check the accuracy of a candidate’s information and verify that all details provided are truthful while respecting their privacy rights.
Investigate the candidate’s information without violating their privacy rights. Review their qualification materials, such as diplomas and certifications, and have the candidate sign a copy of their resume for your documentation, which certifies its authenticity.
Verify the candidate’s identity and confirm they are over 16 years of age. Conduct a background check to ensure that they have been terminated from prior jobs and are not subject to a non-compete, otherwise, you may be liable for damages to the other employer (see Employment Contracts Act §91). Ask candidates to provide documentation confirming their termination from their previous position.
A candidate must provide truthful information to an employer and failing to do so could constitute resume fraud, but only if the false information is material. For example, false statements about marital or childbirth status do not constitute material fraud as they fall within the individual’s expectation of privacy.
You must accurately inform the candidate about the workplace, duties, conditions, hazards, compensation, and benefits—ideally in writing with their signature for acknowledgment. Failure to provide accurate information may constitute fraud and harm the employee’s interests, resulting in employer liability for damages.
An employer may require a new employee to provide basic background information, such as their skills, education, qualification certificates, work experience, and residential address. If any of this information is untruthful, you may terminate the employment contract and, if harmed, claim damages.
Verifying candidate information and clearly outlining job expectations helps avoid fraud and reduces legal risks for the employer.
Onboarding Compliance
China has heightened legal requirements for handling personal and medical information, and for hiring certain classes of workers, such as minors and foreigners.
You may hire minors between the ages of 16 to 18, but not for restricted jobs, such as those with occupational hazards or requiring significant physical exertion. Employers are required to protect the legal rights of such minors. You may also hire students during the summer vacation or their free time during a semester; these arrangements do not constitute full-time employment relationships, and a contract is not required. However, consider signing an agreement with the university to more clearly define expectations.
If the employee is a foreigner, they must obtain a work permit (see Foreign Worker Employment Administrative Rules § 8). You may not take possession of the employee’s identity documents or request any form of deposit from them (see Employment Contracts Act §9).
Sensitive personal information, such as fingerprints and retinal scans, may be collected if necessary for the employer. While a medical examination for employees is generally not required, requesting one can help determine whether a candidate is suitable for the position. A medical examination is mandatory for certain positions, including those involving exposure to occupational hazards, food service workers, or underage workers.
Avoid legal problems by following the rules for minors and foreign workers, and handle privacy and medical information compliantly.
Offering Employment
Conditions for employment can be included in the offer letter, such as a provision that the job offer will be rescinded automatically if the candidate makes any misrepresentation. In most cases, an employment offer cannot be rescinded once it has been delivered to the worker. Specifically, Civil Code §476 provides this result if the offeree reasonably believes the offer is irrevocable and makes reasonable preparations to perform the contract.
The offer itself is not an employment contract; rather, it is an ordinary civil law contract that is superseded when the employment contract is entered into by the parties.
You may sign a retention agreement with an employee as part of the offer, but only if you incur expenses to provide them with specialized skill training prior to their commencing work for a reasonable retention period.
Probationary Period Basics
Legally, a probationary period in Chinese law is an inseparable part of the employment contract, regardless of whether it is a one-, two-, or five-year long contract; there cannot be a separate agreement for a probationary period.
The probationary period provisions must be established through fair and equal negotiations, which means that coercive or high-pressure tactics may not be used. Working conditions during the probationary period are strictly regulated by the Employment Contracts Act. An employee is entitled to equal treatment and working conditions as other employees, including their right to guaranteed breaks, holidays, a safe and healthy work environment, training, and social security benefits.
An employer may use a job preview before starting a probationary period; however, an employment contract will be automatically formed if the statutory conditions for the relationship are met.
Firing workers during probation
The probationary period is your only chance to terminate an employee on the grounds that they do not meet the job requirements.
A probationary period employee who fails to satisfy the job requirements may be freely terminated without financial compensation. On the other hand, a probationary period employee with poor performance may only be terminated without financial compensation if they are first transferred to a different position or offered additional training and continue to perform poorly.
Under the China Employment Contracts Act §39(a)(1), these are two distinct situations. An employer may not require an employee to pay back any amount for quitting during the probationary period unless doing so causes damages.
An employee found to be mentally ill during the probationary period may terminate their contract if there is a diagnosis showing that the mental illness prevents them from meeting job requirements, but special regulations apply to this process.
You may have to pay financial compensation when terminating an employee during their trial period, depending on the grounds for the discharge. No compensation is required for terminations due to negligence, but compensation must be paid when terminating an employee for poor performance during the trial period.
You must produce documentation demonstrating why the probationary employee is materially unsuitable for the position or why there was a violation of China Employment Contracts Act §39. Without this, the termination is unlawful. In such cases, the Administrative Regulations §87 require the terminated employee be paid financial compensation. Probationary employees are entitled to half a month’s salary as financial compensation as a severance payment since they have been in the role for less than six months (see Employment Contracts Act §47). Note that the salary, and therefore severance, for a probationary employee must be at least 80% of the salary for other employees in the same position or 80% of the post-probationary salary, and it must also be higher than the local minimum wage.
While the legal requirements during the probationary period are lessened, it doesn’t mean that you may arbitrarily fire the employee, as this would constitute unlawful termination and the employee would be entitled to make a claim against you in employment arbitration.
The statutory process for terminating an employee must be followed even during the probationary period. If the employer cannot follow the process and nonetheless is unwilling or unable to continue the employment contract, the employer must pay double financial compensation.
Social Security Enrollment Requirements During Probation
In China, failing to enroll a probationary period employee in social security is illegal. Under the administrative regulations, employers must file the required paperwork with the government within 30 days of the hire date and make monthly contributions for the employee.
Employers must, however, make best efforts to enroll employees in social security by the end of the month in which they are hired, and failure to do so will result in fines.
A late penalty accrues on unpaid social security contributions in the amount of 0.5% per day. Employees who have not been enrolled in Social Security on time are entitled to terminate their employment contract and demand financial compensation. Moreover, employers are required to compensate employees for any denial of social security coverage resulting from a lack of proper enrollment.
If an unenrolled employee is injured or dies, you will be liable to pay for their medical treatment and workers’ compensation. Any employment contract provisions stating otherwise are invalid as a matter of law. The Chinese government vigorously enforces these legal obligations to ensure that compliance with workers’ rights regulations is fully achieved.
Sources
This article was translated to American English using the User Centered Translation approach from the following Chinese government publications. The content was reformatted and put in order.
https://hrss.nc.gov.cn/ncsrsj/tzgg/202404/f04475fe39ed476c835590bef2d5903d.shtml
https://rsj.beijing.gov.cn/xwsl/mtgz/201912/t20191206_935324.html
https://rsj.beijing.gov.cn/xwsl/mtgz/201912/t20191206_935324.html
https://rsj.sh.gov.cn/trdhy_17355/20201230/t0035_1397149.html