China Hiring/Employment Compliance
After you set up a subsidiary, you need to focus on hiring dedicated talent that will help grow your business. However, the process involves more than just finding the right candidates. Companies need to understand every aspect of Chinese employment law and compliance to avoid fines or other penalties.
How to Hire Employees in China
China employment compliance begins when you start to hire employees. Chinese labor laws lay out basic principles for hiring, including treating all employees fairly and equally regardless of race or sex. Employers are also not allowed to hire anyone under the age of 16.
Employers must sign employment agreements with their workers when they are hired. However, the employment agreement process depends on your business structure. Limited companies are the only businesses that can sign contracts directly with Chinese workers, while a representative office must hire local employees through a local service unit — a licensed third party.
China Employment Compliance
To ensure employment compliance, keep in mind the maximum number of hours employees can work each day and week. The Labor Law of the People’s Republic of China states that employees cannot work more than eight hours a day or 44 hours a week. It also designates a five-day work week, with government offices closed on the weekends. Employees typically work from 8 a.m. to 6 p.m. every day with a two-hour lunch break from noon to 2 p.m.
The law also outlines paid vacation times based on the number of years worked. Employees who have worked less than one year do not get vacation time, but vacation days accumulate until those who have worked 20 years get 15 days of paid annual leave.
How to Onboard Employees in China
The best way to onboard employees is to create a strong employment contract that includes the employee’s compensation, benefits, and termination regulations. The Chinese labor law mandates employers to have an employment contract with employees, and it states that all offer letters and contracts should include compensation amounts in Chinese yuan renminbi.
Although not required, it is best practice to let employees know ahead of time what you expect in terms of a code of conduct, dress code, working hours, and more. Sending out an email before an employee’s first day can create an overall better experience and lay out expectations in advance.
Benefits of China Hiring Outsourcing
Instead of hiring employees in China and keeping track of employment compliance alone, you can work with a global PEO. Globalization Partners handles everything from hiring employees to ensuring your company’s compliance with all employment laws. We can even act as the employer of record to take the liability off your shoulders and place it on ours.
Contact us today to learn more about our services and how we can help expand your business into China.