China Employment Contracts Guide for Foreigners
Employment contracts in China are governed by the Labor Contract Law, which provides strong protections for employees. This guide explains what foreign employees and employers need to know about employment agreements in China.
Mandatory Written Contract
Chinese law requires a written employment contract within one month of the employee starting work. If the employer fails to provide one:
- After 1 month: The employer must pay double salary
- After 1 year: The employment is deemed to be an open-term (indefinite) contract
Required Contract Terms
Every employment contract must include:
- Employer’s name, address, and legal representative
- Employee’s name, address, and ID number
- Contract term (fixed-term, open-term, or project-based)
- Job description and work location
- Working hours, rest, and vacation
- Remuneration (salary, bonuses, allowances)
- Social insurance provisions
- Labor protection and working conditions
- Other matters required by law
Probation Periods
- Contract of 3 months–1 year: probation up to 1 month
- Contract of 1–3 years: probation up to 2 months
- Contract of 3+ years or open-term: probation up to 6 months
- Short-term or project-based contracts: no probation period
- Probation salary must be at least 80% of the agreed post-probation salary and not below the local minimum wage
Termination and Severance
China provides strong protections against termination. Employers may terminate only for specific statutory reasons. Unlawful termination results in double severance (2 months’ salary per year of service).
Severance is generally 1 month’s salary per year of service, capped at 3x the local average salary and 12 years maximum for high earners.
Special Considerations for Foreign Employees
- Work permit and residence permit must be maintained throughout employment
- Social insurance contributions are mandatory in most cities (with some bilateral treaty exceptions)
- Termination may affect visa status — plan for transition periods
- Non-compete clauses are enforceable but require compensation during the restricted period
- Foreign employees may negotiate for international arbitration clauses (not standard in Chinese employment contracts)
Need help with an employment contract? Contact us for a referral to an employment law specialist.
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