Who this guide is for
Foreign founders, legal representatives, country managers and HR teams employing staff through an entity in mainland China. It covers ordinary full-time employment. Dispatch, part-time work, representative offices, senior executives, cross-border assignments and employees working in multiple cities require a separate structure and local advice.
Why the contract carries more weight in China
Managers from an at-will system may expect an offer letter, handbook and notice payment to preserve broad flexibility. China starts elsewhere: the employing entity and employee establish the employment relationship when work begins, while the written labor contract records mandatory terms and statutory protections. Clauses cannot remove minimum rights merely because the employee signed them.
The first operational risk is timing. Article 10 of the Labor Contract Law requires a written contract and allows no more than one month from the start of employment to conclude it. Articles 82 of the Law and 6–7 of its Implementing Regulations create double-wage and open-ended-contract consequences in specified periods when the employer does not sign. Never conceal a late signature with a false start date; preserve the actual facts and obtain advice on remediation.
Before you issue an offer: identify the legal employer
| Check | What to verify | Why it matters |
|---|---|---|
| Registered entity | Full Chinese name, unified social credit code, registered address and authorized signatory. | A brand, foreign parent or representative office may not be the entity that can employ the worker. |
| Operating role | Which entity directs work, pays salary, enrolls social insurance and owns the position. | Conflicting entities create proof, payroll and immigration problems. |
| Location | Primary city, regular worksites, travel and any remote-work arrangement. | Local wage, social-insurance and procedure rules differ; an unlimited mobility clause is not a safe substitute for a real plan. |
| Authorization | Board, legal representative, chop and delegation requirements. | The recruiter or foreign manager may not have authority to bind the company. |
Complete this check before the candidate resigns elsewhere. If a staffing agency, affiliate or overseas parent is involved, map each party’s role in writing rather than calling the arrangement “standard.”
Contract type and mandatory terms
Article 12 recognizes fixed-term, open-ended and project/task-completion contracts. Choose the form for the real business need. An open-ended contract has no agreed expiry date; it is not lifetime employment, but ending it still requires a lawful route. Article 14 identifies circumstances in which an employee may be entitled to an open-ended contract, including qualifying long service and, subject to the statutory conditions, consecutive fixed-term contracts.
Article 17 requires the parties’ identifying details; contract term; job content and location; working time, rest and leave; remuneration; social insurance; labor protection, working conditions and occupational-hazard protection; and other legally required matters. Practical drafting should also clarify:
- reporting line, objective duties and any material travel;
- gross base pay, fixed allowances, variable-pay rules, payday and currency;
- the lawful working-hours system and overtime approval/recording process;
- probation, if used, matched to the contract term;
- leave, benefits and the applicable company policies;
- confidentiality, intellectual property and narrowly scoped post-employment obligations;
- renewal, change and departure administration.
Do not promise “net salary” unless tax and social-insurance changes, reconciliations and employer gross-up obligations are precisely allocated. Do not write that every bonus is discretionary if the commercial offer promises a fixed amount.
Bilingual drafting and company policies
A bilingual contract helps a foreign manager and employee understand the deal, but translation does not cure inconsistent terms. Create one approved term sheet, reconcile every number, date, defined term and appendix, and state which language governs if the versions differ. Have a qualified reader check the controlling version. The phrase “for visa purposes only” does not make an inaccurate salary or role harmless.
A handbook can contain attendance, expenses, security, conduct and performance processes, but it is not a blank power to change the contract. Article 4 requires a consultation process for rules directly affecting employees’ interests and requires those rules to be publicized or communicated. Keep the draft, consultation record, adopted version, distribution evidence and employee acknowledgment. Local adjudicators examine both validity and actual communication.
A controlled signing and onboarding process
- Freeze the term sheet. Confirm entity, role, city, term, probation, hours, compensation and benefits with finance, HR and the hiring manager.
- Check local requirements. Confirm minimum wage, social-insurance registration, special-hours approvals and mandatory local language or forms.
- Issue aligned documents. Make the offer, contract, work-permit material and compensation plan consistent.
- Sign genuine originals. Ideally sign before day one; record the real employment start date and give the employee one signed original as Article 16 requires.
- Collect only necessary onboarding data. Verify identity, qualifications and account details through a documented, privacy-conscious process.
- Complete registrations. Enroll payroll and social insurance and, for a foreign employee, coordinate work authorization.
- Record policy receipt. Give the employee accessible policies and retain dated proof.
- Calendar decisions. Schedule probation reviews, permit renewals and contract renewal far enough ahead for lawful action.
Hypothetical situations
Hypothetical 1 — wrong entity: a UK founder sends a Shanghai hire a London template naming the UK parent. Salary is paid by the Shanghai subsidiary and all work is directed locally. The team should stop, identify the lawful employing structure and replace the documents before work begins.
Hypothetical 2 — late signature: HR discovers in month three that an employee signed only an offer. The company should preserve the true start date, sign a compliant contract promptly, quantify potential exposure and seek local advice. Backdating creates a second evidence problem.
Hypothetical 3 — bilingual mismatch: the English version promises a guaranteed annual bonus while the Chinese version says it is discretionary. Resolve the conflict in a signed amendment before relying on either version.
Employer file: documents worth keeping
- ✓ Candidate-approved offer and final term sheet
- ✓ Entity and signatory verification
- ✓ Two-language comparison and signed originals
- ✓ Actual start date and employee roster entry
- ✓ Job description and disclosed recruitment conditions
- ✓ Compensation and bonus plan
- ✓ Working-hours classification and approval, if applicable
- ✓ Policy consultation, publication and receipt evidence
- ✓ Payroll, attendance, leave and social-insurance records
- ✓ Permit records for any foreign employee
- ✓ Probation and renewal calendar
Escalate before signing if the arrangement uses a foreign employer, representative office, labor dispatch, cross-border remote work, a broad non-compete, training repayment, equity, or inconsistent sponsor and employer names.
Official sources
General information only. This guide is not legal, tax or immigration advice. National rules, local implementation and the facts of a case can produce different results. Confirm time-sensitive procedures with the competent local authority or a qualified China professional.