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SALARY PAYMENT IN Chinese Yuan (CNY, ¥)
CONTRACT LANGUAGES Mandarin & English
PAYROLL TAX 39.50% – 41.20%
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
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Starting a new job in China can be exciting, but navigating the world of employment contracts might seem daunting. One key aspect to understand is the probation period, which can vary in length and hold different implications for both employers and employees.
This article serves as your roadmap, shedding light on the nuances of probation periods in China.
Probation periods are common features in Chinese employment contracts. This period gives employers a chance to evaluate a new employee’s skills, performance, and overall suitability for the job. The length of the probation period is legally regulated and directly tied to the duration of the employment contract.
Understanding employment contracts and probation periods is crucial for both employers and employees in China. Here’s a breakdown of key aspects:
China has specific regulations governing probation periods in employment contracts. The length of a probation period is directly linked to the total duration of the employment contract. Here are the probationary periods based on contract duration:
Throughout the probation period, employers have the authority to terminate the employment with minimal notice if the employee fails to meet job requirements. It’s mandated that an employee’s salary during this probationary phase cannot be less than 80% of the full contract salary or below the region’s minimum wage.
This balances companies’ need to assess new hires with protecting workers from exploitation.
While probationary employees in China enjoy some legal rights, they have fewer protections compared to employees who have completed their probation. During this period, employers can terminate employment based on performance or disciplinary issues, but they must follow specific regulations outlined in the Labor Contract Law. These regulations require:
Probationary employees still enjoy fundamental rights, including:
It’s essential for both employers and employees to understand these legal rights and obligations to ensure a fair and lawful probationary period in China. If an employee believes their termination during probation was unfair or unjustified, they have the right to seek legal counsel and potentially challenge the decision through official channels.
Chinese labor laws establish clear legal obligations for employers, ensuring fair treatment of employees, promoting safe working conditions, and contributing to the social welfare system. These key responsibilities include:
Employers must provide a written employment contract to all employees within one month of their start date. Failure to do so can result in legal penalties and, after one year, an automatic conversion to a non-fixed term contract offering greater job security.
Employers are legally bound to pay wages that meet or exceed the local minimum wage standard. They cannot withhold payment without a legitimate reason, and any overtime hours must be strictly limited and compensated at an increased rate.
Employers are legally required to contribute to China’s social insurance system. This system provides employees with essential benefits, including pensions, medical insurance, unemployment insurance, work-injury insurance, and maternity benefits. In some locations, employers may also be required to contribute to the Housing Provident Fund, which helps with housing expenses.
Employers cannot avoid these social insurance and benefit contributions, even if an employee agrees to waive them. These contributions are essential for employee well-being and a legal obligation for all employers in China.
In China, the inclusion of a probationary period in employment contracts is not mandatory but is a common practice adopted by many employers. The decision to set a probation period is at the employer’s discretion, and it must comply with the limits set by Chinese labor laws regarding its duration based on the total length of the employment contract.
The use of probationary periods in employment contracts offers several benefits for both employers and employees, ensuring a smoother transition into new roles and responsibilities.
Let’s explore the specific benefits for both employers and employees:
Managing probationary employees requires a balance between careful evaluation and providing support for integration and success. Here are some best practices for employers in China:
Your business can easily hire employees in China without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
If the employee is on a fixed-term contract then the employer needs to give 3 days’ notice
Employees needs to give at least 3 days’ notice before resigning during the probation period for fixed-term contracts. If it is an open-ended contract then 30 days’ standard notice is expected.
Standard probationary periods in China depend on the type of contract the employee is under. For open-ended contracts, a probationary periods is not possible. For a fixed-term contracts probationary periods depends on the length of contract.
For example, a 1 year contract has a 1 month probation period. 2 year contracts can have up to 2 months’ probation period and 3 year contracts can have up to 6 months of probation.
Employers cannot extend the probationary periods in China. For open-ended contracts it is not possible to have any probation period and for fixed-term contract it depends on the length of the contract to determine how long the probation period can be. The length of each is stated above.
During the probation period the employer needs to give 3 days’ notice in order to dismiss and terminate a fixed-term contract. For open ended contracts where a probation period is not possible then the standard 30 days’ notice is necessary for termination.
Yes, in China during the probation period for fix-term contracts the employer needs to give a minimum of 3 days’ notice.
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71 Robinson Road #13-153
068895, Singapore
+65 3105 1170
Skalitzer Str. 85/86
10997, Berlin
+49 30 3119 9653
1700 S. Lamar Blvd Suite 338
Austin, Texas 78704
+1 (737) 265-6065
See more locations
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