China Employment Contract Guide for Foreigners

Before starting work in China, you'll sign an employment contract. Understanding what should be in it—and what to watch out for—can save you from serious problems later.

Legal Requirements

Under Chinese law, employment contracts must include:

• Employer and employee identification
• Contract term (fixed-term or open-ended)
• Job description and work location
• Working hours and rest periods
• Salary and payment method
• Social insurance provisions
• Labor protection and working conditions

Contract Types

Fixed-Term Contract

Most common for foreigners:

• Specific start and end dates
• Usually 1-3 years
• Tied to work permit validity

Open-Ended Contract

Less common for foreigners but possible:

• No fixed end date
• Stronger job security
• Harder for employer to terminate

Key Clauses to Review

Salary and Benefits

• Base salary: Clear amount in RMB
• Bonuses: Conditions and calculation method
• Housing allowance: Amount or provided accommodation
• Flight allowance: Annual home leave flights
• Payment date: When salary is paid

Working Hours

• Standard: 8 hours/day, 40 hours/week
• Overtime rules and compensation
• Weekend and holiday arrangements

Leave Entitlements

• Annual leave: Minimum 5 days (1-10 years service)
• Sick leave: Duration and pay rate
• Public holidays: 11 days per year
• Home leave: For visiting home country

Probation Period

• Maximum 6 months (for contracts 3+ years)
• Salary must be at least 80% of full salary
• Easier termination during probation

Termination Clauses

• Notice period requirements
• Grounds for termination
• Severance payment terms
• What happens to work permit

Red Flags

• No Chinese version of contract
• Salary paid in cash or to overseas account
• No mention of social insurance
• Excessive probation period
• Unreasonable non-compete clauses
• Employer can change terms unilaterally
• Penalties for resignation

Negotiation Points

Items often negotiable:

• Salary and bonus structure
• Housing and relocation allowances
• Flight allowances
• Additional leave days
• Notice period (both ways)
• Non-compete scope and compensation

Work Permit Connection

Your employment contract is tied to your work permit:

• Contract term affects permit duration
• Changing employers requires new permit
• Contract termination affects your legal status

Before Signing

1. Read both Chinese and English versions carefully
2. Clarify anything unclear in writing
3. Verify the company's legitimacy
4. Understand termination implications
5. Consider having a lawyer review