Employment Law in China

Dong Wang is a barrister and solicitor in New Zealand. He is a former part-time employment arbitrator of the Shenzhen Employment Dispute Arbitration Committee, member of GuangDonng Employment Law Society, and expert witness on Chinese employment law for the Supreme Court of Queensland, Australia, with extensive theoretical and practical experience. Peng Zhao is the Director of Royal Law Firm, China. He has extensive practical experience in employment dispute cases, including the 2016 Linak case before the Supreme Court of China. He is also highly experienced as corporate legal counsel for business operations, covering commercial law, company law, and intellectual property law.

Preface
Glossary of Common Terms

Chapter 1: Employment Relations

Introduction

Section 1: Employment Relationships: Principle and Types

1. What is the principle that employer and employee treat each other?
2. What are the types of employment relations under China's employment laws?
3. Should I sign a collective contract or an individual contract when I join a company?
4. What is the legal effect of signing collective contract by employer and employees?
5. Is it legal for my employer to sign a fixed-term contract with me instead of a permanent employment contract?
6. Is my employment contract on general work hours (or irregular work hours) considered valid?
7. What are common special employment relationships in daily life?
8. What are common contractor relationships in daily life? What are common contractor relationships in daily life?

Section 2: Difference between Employment and Contractor Relationships

9. How can I distinguish between my casual employees and full-time employees?
10. Can casual employees request to be transferred to a permanent or other forms of employment contracts?
11. Can a volunteer be an employee?
12. How do I distinguish between an employment relationship and a contractor relationship?
13. I am a cleaner with a regular work schedule. Am I an employee of this company or a contractor?
14. Are employees on call at home entitled to wage payment?
15. What are the different legal consequences of my employment relationship or contractor relationship with a company?
16. What are the differences between employment relationships of an assignment contract, a casual contract, and a contractor relationship?

Section 3: Special Types of Workers and Work Relationships

17. I am a worker of 15 years old. Should my employer assume the liability for my work-related injury?
18. Is the family member of the boss hired by the company considered an employee?
19. If my employer continues to employ me after I reach the retirement age, do we still maintain the employment relationship?
20. A company just hired a 62-year employee. Is it employment relationship?
21. My company has signed a labor outsourcing agreement with a human resources company. Is this legal?
22. I was assigned to work for a company by a human resources company. What is the relationship between me and the human resources company?
23. Can a labor dispatch company sign permanent employment contracts with its staff?
24. We are a representative office of a foreign company. Can we hire employees directly in China?
25. I am a civil servant. Is there an employment relationship between me and the government?

Section 4: Labour Dispute Procedure

26. What avenues should be taken to handle employment disputes between employers and employees?
27. Is there a time limitation for employees or employers to file employment arbitration application?
28. Do the Labor Arbitration Committee or Court Proactively Review the Limitation of Labor Arbitration?
29. Is employees’ claim of employment relationship confirmation subject to one-year limitation of labor arbitration?
30. Is it too late for me to claim probation period damages to the employer?
31. What are the interruption and suspension of the limitation of labor arbitration?
32. Which labor arbitration committee has the authority to handle labor dispute cases?
33. Can my company appeal to the court after losing in labor arbitration?

Chapter 2: Employment Commencement

Introduction

Section 1: Employer Obligations at the Start

34. What types of social insurance should employers buy for employees?
35. What liability should an employer bear if it reneges on its wage commitment to an employee candidate?
36. When does the employment relationship begin: at the actual start of work or the time specified in the employment contract?
37. How should employers set up and maintain employees' employment files?
38. An employee refused to sign an employment contract after joining our company. What should we do?
39. Is it legal for the employer to collect my deposit and retain my certificate?
40. An employer arranged a no-pay trial work for a candidate. Is it legal?
41. Is it legal for my employer not to pay me as a student intern worker?

Section 2: Double-Wage Damages and Employer Immunity

42. What is double-wage damages for the absence of a signed employment contract?
43. Under what circumstances should employers sign written employment contracts with their employees?
44. What are the exemptions from the obligation to pay double-wage damages?
45. Can subsequent or retroactive signing of an employment contract exempt the employer from double-wage damages?
46. Are there any typical judicial decisions on subsequent or retroactive signing of employment contracts?
47. Is a host employer liable for double-wage damages for invalid labor dispatch?
48. Is employer liable if employee purposely has someone else to sign the employment contract and then claims double-wage damages?
49. Will an amendment agreement after the expiration of a fixed-term employment contract lead to double-wage damages?
50. What are the other exceptions in practice under which employers are exempt from double-wage damages?

Section 3: Calculation of Double-Wage Damages

51. How is the actionable period for double-wage damages determined?
52. How are double-wage damages calculated for newly joined employee?
53. Is it too late for me to claim the double-wage damages?
54. How are double-wage damages calculated for not signing a permanent employment contract?
55. Under what circumstances must employers sign permanent employment contracts with employees?
56. Should a permanent employment contract be signed after two consecutive fixed-term employment contracts?
57. How are double-wage damages calculated for not signing a new contract after the expiration of a fixed-term employment contract?
58. How is the wage standard for double-wage damages determined?

Section 4: Probation Period and Validity of Employment

59. How long of a probation period can an employer provide for a newly recruited employee?
60. I am a newly recruited employee of the company. What rights and obligations do I have during the probation period?
61. What legal consequences will an employer face for extending an newly hired employee’s probation period?
62. Is it legal for an employer to require a current employee to undergo a second probation period?
63. An employer notified its employee of termination only after the probation period. Is it legal?
64. Is the employment contract I signed invalid?
65. Is my employer legal to sign an assignment contract with me?
66. Is my labor dispatch contract invalid?
67. What is the current judicial trial rule for invalid labor dispatch in China？

Chapter 3: Employee Entitlements

Introduction

Section 1: Employee Leave and Special Entitlements

68. As an employee, what are my basic leave rights?
69. What are the public holidays for employees?
70. I am an HR manager. How do I calculate overtime pay for employees?
71. How do I calculate overtime pay under special workhour systems?
72. Can employees' time-off in lieu be used to offset overtime hours?
73. How does law proscribe employees’ entitlement of paid annual leave?
74. How should employers manage employees’ paid annual leave?
75. How should employers manage employees’ accrued annual leave over the years?
76. I am an employee. What bereavement entitlements do I have?
77. My wife is about to give birth. What are my paternity leave rights?
78. How do Labor Regulations stipulate the High-Temperature Allowance?
79. I am an employee. What is my work break entitlement?

Section 2: Sick Leave and Female Employee Rights

80. I am sick, how should I apply for leave from the employer?
81. I am an employee. How many days of paid sick leave am I entitled to?
82. How should our company pay our employees during their sick leave?
83. Are casual employees and employees on Irregular s and General Work Hours entitled to paid sick leave?
84. How long can an employee with cancer take medical care leave?
85. What should I do if an employee of my company has not recovered after the expiration of the medical care leave?
86. The labor capacity appraisal has a conclusion after my medical care leave expires. What should I do?
87. I suffer from a chronic illness and am currently in a lawsuit with my employer. Must I go to work?
88. I'm a pregnant employee. What are my rights?
89. What are the special protections for female employees under the employment laws?
90. Female employees earn less than male employees. Does the employer violate the principle of equal pay for equal work?

Section 3: Employers Handling Work Injuries

91. What circumstances should be identified as work injuries?
92. What is employee’s occupational disease?
93. What types of diseases are occupational diseases?
94. How do I handle work injury recurrence?
95. What should the employers do if an employee has not recovered after the expiration of the paid work injury leave?
96. Employee’s paid work injury leave has expired, but the application for labor capacity appraisal is being processed. How should the employer pay the employee?
97. How do our company handle matters related to the application for extension of the paid work injury leave?
98. What should we do upon the completion of the labor capacity appraisal for an employee with a work-related injury or an occupational disease?

Section 4: Employee Entitlement for Work Injuries

99. What are the entitlements for employees with work-related injuries or occupational diseases?
100. Can an employee who continues working after work injury request both paid wages and work injury leave pay?
101. An employee who suffered a car accident injury on his way home has been compensated by the at-fault party. Can he additionally get work injury entitlements?
102. If I develop pneumoconiosis after leaving my job, should the employer bear the responsibility?
103. Which employer is liable for the occupational disease suffered by an employee who had been exposed to the occupational hazard in workplaces of both former and current employers?
104. Can commercial accident insurance for employee offset employer’s work-related injury liabilities?
105. Can employees claim for mental damages in employment disputes?
106. Are employees suffering from occupational diseases or work-related injuries entitled to mental damages?

Chapter 4: Performance of Employment Contract

Introduction

Section 1: Wages Entitlement, Calculation and Payment

107. How are employees' received wages calculated?
108. My wages is lower than than the minimum wage. Is this legal?
109. How should employees be paid during employer’s business closure?
110. Should employers pay wages to employees during an epidemic lockdown?
111. Is it legal for employers to pay only the minimum wage during the central furlough period of irregular and general work hours?
112. How do I calculate the wages of employees under the piecework wage system?
113. Are the piecework quota and piecework unit price set by the employer reasonable?
114. How are wages calculated under package wage system?
115. An employer pays night allowance under the minimum wage to an employee on night duty. Is it legal?
116. Are companies still obligated to pay commissions or bonuses promised to employees after the employees leave?
117. My employer significantly reduced my wages. Is it legal?

Section 2: Employer Management and Disciplinary Action

118. How do Chinese laws and judicial practices address workplace human rights issues?
119. Can employers contact employees outside work hours?
120. What kind of company rules and regulations are binding on employees?
121. Is it legally permissible for my employer to discipline me?
122. Is it legal for my company to suspend an employee for a performance investigation?
123. Can an employer impose a fine on an employee and deduct their wages?
124. Should an employee compensate the employer for the losses caused by their fault?
125. What are the legal consequences of an employee being transferred by two employers?
126. What are the legal consequences of multiple employers using a full-time employee at the same time?
127. Who is liable for damages to a third party caused by an employee who is working for the employer?
128. Under what circumstances can an employer transfer positions of their employees?
129. How should an employer legally transfer the position of an employee?

Section 3: Equity Incentive, Strike, and Employer Misconduct

130. Are employees entitled to collective strike?
131. Are there any reference judgments on the legality of dismissing employees who participated in collective strikes?
132. What is the equity incentive agreement between employer and employee?
133. Is the dispute between an employer and an employee arising from the equity incentive agreement a labor dispute?
134. The employer is not the signing subject of the equity incentive. Who is liable under the equity incentive agreement in the labor dispute?
135. The employee to an equity incentive agreement did not receive the equity benefits. Is it legal?
136. What are unjustified wage deduction and unjustified wage arrear by employer?
137. What is the difference in limitation of arbitration between unjustified wage deduction and unjustified wage arrear?
138. What is employer's refusal to pay overtime wage?
139. What administrative penalties may be imposed on employers who violate employment law?
140. Can employers or their representatives be held criminally liable for violating employment law?

Chapter 5: Employment termination

Introduction

Section 1: Termination: Resignation, Retirement, or Party Demise

141. What are the ways for termination of employment relationships?
142. I don’t want to work for my employer any more. How should I resign?
143. Are employers liable for economic compensation for employees’ forced resignation?
144. I had to resign due to the relocation of my employer. Am I entitled to economic compensation?
145. My boss fired me, but now he claims I resigned. What can I do?
146. How does the law stipulate the statutory retirement age?
147. What are the current national and local regulations and referable case law on retirement age?
148. Can an employer terminate an employee who has reached retirement age?
149. Can an employer terminate an employee who has reached retirement age during their medical treatment?
150. What should employs do if their employee dies from illness or non-work-related injury?
151. What should employees do if their employer goes bankrupt, is deregistered, or is ordered to close?

Section 2: Employer-Initiated Termination

152. How should employers handle the procedure of notifying trade union when terminating employees?
153. Under what circumstances should our company pay medical treatment allowance to our employees?
154. What requirements should an employer meet to legally terminate an employee?
155. How can employers experiencing business hardship legally reduce their workforce to survive?
156. Can our company implement economic redundancy due to productional transfer, major technological innovation, or operational adjustment?
157. My employer terminates my employment contract on the ground of major change in objective situation. Is it legal?
158. Can we terminate an employee’s employment due to his poor performance?
159. What are the differences between terminations due to economic redundancy and the major change in objective situation?
160. What types of employees are entitled to special non-termination protection in employers’ layoffs?
161. My employee is sentenced to imprisonment for committing a crime. Can we terminate his employment?
162. My employer fired me for gross negligence and corruption. Is it legal?
163. One of my employees is also working for another company. Can we fire him?

Section 3: Calculation of Termination Compensation

164. How do I calculate economic compensation?
165. How do I calculate punitive damages for illegal termination of employment relationship?
166. What are the considerations for calculating economic compensation and punitive damages?
167. How to distinguish the calculation of economic compensation and punitive damages for service years before and after 2008?
168. How do I calculate the payment in lieu of notice?
169. Are employers liable for wages losses after it illegally terminated employees?
170. Can I get unemployment insurance benefit after I lost my job?
171. Under what circumstances should employers be liable for supplementary damages?

Section 4: Other issues for Employment Termination

172. My medical care leave does not expire, but my fixed term employment contract does. Can my employer terminate the employment contract?
173. My employer illegally fired me. Can I request reinstatement?
174. Can employees hold employers’ boss personally liable for their labor remunerations or compensations?
175. Is the boss of a limited liability company personally liable for outstanding wages?
176. Under what circumstances a departed employee may need to compensate the former employer?
177. Is an employee liable for the employer’s losses caused by inadequate notice of resignation?
178. Are employees who caused losses to their employers during their tenure liable for the same after their employments end?
179. Are employees who resign in breach of their training service agreements liable for contractual damages?
180. Is it legal for an employee to seek labor arbitration after reaching a compensation agreement with our company and already receiving payment?

Chapter 6 Trade Secrets, Non-competition and Personal Information Protection

Introduction

Section 1: Trade Secret Protection

181. How do employers protect their trade secrets?
182. What are the legal criteria for information to qualify as a trade secret?
183. How do right holders establish the legal existence of their trade secrets?
184. How do right holders prove the non-publicity of trade secrets?
185. What are the common trade secret information in practice?
186. What are the types of infringement of trade secrets?
187. How do right holders of trade secrets to prove infringement acts of trade secrets?
188. How do right holders of trade secrets prove the acts of use infringement of trade secret?
189. Can employer pursue departed employee for customer poaching?
190. What rule do Chinese courts tend to use in determining whether customer poaching constitutes infringement?
191. What are the immunities for trade secrets infringement in practice?
192. Who are the right holders and tortfeasors in trade secret infringement cases?
193. What civil liabilities are trade secret infringers subject to?
194. What administrative liabilities are trade secret infringers subject to?
195. What criminal liabilities are trade secret infringers subject to?

Section 2: Non-Competition

196. What is the difference between trade secret and non-competition?
197. What is non-competition and liability for breach of non-competition?
198. Is it legal for an employer to sign non-competition agreement with all its employees?
199. The non-competition contract between an employer and an employee includes on-the-job non-competition obligation. Is such an agreement valid?
200. Non-competition agreement lacks a non-competition clause. What should I do?
201. My employment contract stipulates that my wages include non-competition allowance. Is such provision legal?
202. Can employers or employees cancel the non-competition agreement?
203. The non-competition penalty stipulated in my non-competition agreement is 5 million. Is this provision binding?

Section 3: Personal Information Protection

204. What are the impacts on employers by the newly implemented Personal Information Protection Act in China?
205. How do a company operating in China handle cross-border provision of personal information?
206. How does our company enter into and conduct registration for a personal information standard contract?
207. Will our company’s registration of outbound-transfer of personal information cause trade secrets to be leaked?
208. Is my company liable for civil damages for violating the Personal Information Protection Act?
209. What are the administrative penalties for violating the Personal Information Protection Act?
210. Can a breach of the Personal Information Protection Act constitute a criminal offence?

Chapter 7 Summary and Practical Guidelines

Introduction

1. Principles of Conduct in Employment Relationships
2. Collective Contracts and Individual Contracts
3. Distinguishing Between Employment Relations and Contractor Relations
4. Selecting Different Types of Employment Contracts During Recruitment
5. Rights and Obligations Under General Work Hours or Irregular Work Hours Employment Contracts
6. Rights and Obligations Under Part-Time Employment Contracts
8. Judicial Procedures for Employment Disputes
9. Matters Related to Recruitment and Employee Onboarding
10. Purchase of Social Insurance
11. Signing Written Employment Contracts
12. Probationary Period for Employees
13. Invalidation of Employment Contract
14. Paid Annual Leave
15. Bereavement Leave
16. Special Protection for Female Employees
17. Maternity Leave and Paternity Leave
18. High-Temperature Allowance
19. Matters Related to Sick Leave
20. Recognition and Handling of Work Injuries
21. Work Injury Entitlements
22. Employee Wages
23. Employee Overtime Pay
24. Workplace Rights and Mental Damages
25. Lawful Disciplinary Actions
26. Employee-related financial compensation
27. Multiple Employers' Use of An Employee
28. Employee position transfer
29. Employee Collective Strike
30. Equity Incentive
31. Unjustified Wage Deduction and Arrear
32. Administrative and criminal penalties for employers violating employment law
33. Resignation and Forced Resignation of Employees
34. Employee Retirement
35. Employee Death and Employer Demise
36. Lawful Dismissal
37. Economic Redundancy
38. Termination for Major Change in Objective Condition
39. Termination of Employment for Employee's Incompetence
40. Termination of Employment Due to Employee's Gross Misconduct
41. Protection of Trade Secrets
42. Non-Competition Agreement
43. Personal Information Protection
44. Company Rules and Regulations and Contracts Management

Afterword