The employment of labor by foreign-invested enterprises within Chinese territory is governed by the People's Republic of China Labor Law, the People's Republic of China Labor Contract Law, the People's Republic of China Social Insurance Law and other laws and regulations.
1. Employment Contracts
Foreign-invested companies are entitled to assess their institutional framework and requirements and recruit workers in the PRC on their own or by commissioning recruitment agencies or personnel service providers. Foreign-invested companies are required to sign written employment contracts with all recruited personnel.
Arbeitsverträge unterteilen sich in befristete Verträge, unbefristete Verträge und Einzelauftragsverträge zum Erledigen spezifischer Aufgaben.
2. Working Hours
By and large, China adopts the 40-hour week at 8 hours a day. If this model cannot be implemented due to the respective type of activity and/or due to the respective peculiarities of the production, alternative models can be approved - i.e. models with varying working hours and comprehensive hourly accounting.
In order to meet the needs of operations and production, employers are allowed to extend the working hours of their employees in consultation with them and with the respective union.
Furthermore, extended working hours are only permissible under the condition that they do not affect the health of the employees. Employees are entitled to overtime pay, which must be at least 150% of regular pay on weekdays, 200% on normal weekdays off (usually Saturdays and/or Sundays) and 300% on public holidays.
3. Public Holidays and Vacations
In the People's Republic of China, the year has 11 public, paid holidays. These are: New Year's Day (1 day), Spring Festival (3 days), Memorial Day (1 day), Labor Day (1 day), Dragon Boat Festival (1 day), Mid-Autumn Festival (1 day) and Day of the nation (3 days).
Employees who have worked continuously for at least 12 months are entitled to paid annual leave. The statutory minimum annual vacation time is as follows: If a worker has already been employed for a total of between 1 and 10 years, they are entitled to 5 days of paid annual vacation; if she is between 10 and 20 years of age, she is entitled to 10 days of paid annual leave; and after 20 years of employment she is entitled to 15 days of paid annual leave. Statutory public holidays and vacation days are not to be deducted from annual leave. In addition, workers enjoy wedding leave, bereavement leave and parental leave by law.
4. Social Security
Social insurance in the PRC includes basic endowment insurance, basic medical insurance, and labor injury, unemployment, and maternity insurance. Foreign-invested companies and their employees are required by law to make social security payments to ensure that employees can receive material support from the government in the event of old age, illness, industrial accidents, unemployment and parenthood.
Foreign nationals employed in the PRC are also covered by Chinese social security by law.
5. Revocation and termination of employment contracts and severance pay
If the employer and employee come to an agreement after consultation, the employment contract can be terminated between them.
The unilateral termination of the employment contract by the employer is subject to stricter conditions and must meet certain legal preconditions - for example that the employee has demonstrably and culpably failed to fulfill the conditions of his employment during the probationary period or that the employee has left for economic reasons of the employer must be dismissed, etc.
If the employer requests to terminate the employment contract in consultation with the employee, or if he is required to terminate the employment contract due to legal circumstances such as employer disqualification or dismissal for economic reasons, the worker shall be paid compensation equal to: based on the number of years the worker has worked for that employer and the monthly salary for each of those years.
6. Work Permit
Foreign-invested companies that employ foreigners must complete the legally relevant procedures for them, such as obtaining the relevant work permit.
Foreigners working in the People's Republic of China must apply for the relevant visa by means of the notification of the foreigner work permit in the People's Republic of China together with the foreigner work permit.
Receipt and eventual approval of the permit is to be handled by the local administrative department for foreigners' affairs through the unified system at https://fuwu.most.gov.cn/lhgzweb/.
7. Intellectual Property Protection
The PRC has an orderly legal system of intellectual property rights and protection that offers a wide range of remedies and legal avenues of enforcement. Likewise, the PRC is a party to most international intellectual property treaties and has adopted a system of intellectual property protection through both legal and administrative channels.
The laws of the PRC protect the following types of intellectual property rights (abbreviated as "IPR" in English): patents (including inventions, utility models and designs), trademarks (including related branded products), designations of origin, copyright (including computer software) and ancillary copyrights, plans of integrated Circuits, new plant breeds, trade secrets, etc.