Liquidation · First hire · Employment flagship · Legal representative · WFOE ops hub.
Dissolution or licence revoke is a statutory ground to end labour contracts — you still settle wages, unused leave and statutory severance (N). N is generally one month of average pay per year of service, with high-earner and 12-year themes (confirm locally). Some no-fault exits also need 30 days’ notice or +1 month (N+1). A true economic layoff (Labour Contract Law Art. 41 style) has a headcount trigger — commonly 20 people or 10%+ — plus explain-to-staff/union and a labour-bureau filing. Firing eight people is not that statute. Mutual termination is often how clean files close; it is not free. At-will firing is not a China tool.
At a glance
| Question | Short answer |
|---|---|
| Does close = no pay? | No. Wages + leave + N. |
| N+1? | N plus one month in lieu of 30 days on some no-fault grounds. |
| Eight people? | Not an Art. 41 mass layoff. |
| Mutual exit? | Often practical. Still budget N or more. |
| Blocks AMR? | Yes — unsettled staff freeze tax/liquidation. |
Scope and legal framework
Labour Contract Law — end of the employing unit. When the employer is dissolved, declared bankrupt, or has its licence revoked, contracts end. Severance is still due on the statutory list of grounds. Unpaid wages are a separate, uglier file.
N and the +1 month. Statutory economic compensation is generally one month of the employee’s average wage in the twelve months before termination, per year of service (partial years rounded by rule). High earners and a twelve-year cap are statutory themes — apply the current local reading. Payment in lieu of 30 days’ notice is the “+1” people search for.
Economic layoff (Art. 41 family). Mass reduction for statutory economic reasons: headcount threshold, 30-day explanation to union or all staff, labour-admin filing, priority rehire themes. Under-threshold cuts are ordinary individual terminations — you do not get the mass-layoff script for free.
Practical workflow
- Roster: start date, wage, leave, pregnancy/occupational-injury flags.
- Choose ground: mutual, dissolution, or a real Art. 41 filing.
- Pay, issue certificates, close SI — then the liquidation tax/AMR chain.
Common mistakes
- Calling eight exits a “mass layoff” to skip individual rules.
- Paying N but skipping the +1 when you gave no notice.
- Leaving pregnant staff or work-injury files for “later.”
Action checklist
- Headcount vs 20 / 10% written down.
- Ground labelled per person.
- N / N+1 worksheet (local average-wage rule).
- SI and wage slips before tax clearance.
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