Employment law in China
Employment Law in China is primarily governed by the Labor Law of the People's Republic of China (1994) and the Labor Contract Law of the People's Republic of China (2008), along with other regulations that address specific aspects of the employment relationship, such as wages, working conditions, social insurance, and dispute resolution. These laws provide a legal framework to protect both employers and employees in China.
Below is an overview of the key aspects of employment law in China:
1. Key Legislation and Legal Framework
Labor Law of the People's Republic of China (1994): The foundational law that covers most aspects of the employment relationship, including working hours, rest days, wages, labor contracts, social insurance, and dispute resolution.
Labor Contract Law of the People's Republic of China (2008): This law specifically regulates the use of labor contracts in China, setting standards for contract formation, terms, renewals, and termination. It aims to improve the rights and protections for workers and ensures fair treatment by employers.
Social Insurance Law of the People's Republic of China (2010): Governs social insurance programs such as pension, medical, unemployment, work injury, and maternity insurance, which are mandatory for most employees.
Workplace Safety Laws: Regulate occupational health and safety standards, and set out the employer's obligations to ensure safe working conditions.
Employment Promotion Law: Focuses on promoting employment opportunities, especially for vulnerable groups, such as young people and rural residents.
2. Employment Contracts
Written Labor Contracts: It is mandatory for employers to enter into a written labor contract with their employees, effective within 1 month of the start of employment. The contract should outline terms such as job description, wage rates, benefits, working hours, and the duration of employment. If an employer fails to provide a written contract, they may face penalties, and the employee is assumed to have an indefinite contract.
Fixed-Term vs. Open-Ended Contracts: Employment contracts can be either fixed-term or open-ended (indefinite). After 2 consecutive years of fixed-term contracts, the employee may be entitled to an open-ended contract, unless the employer has a valid reason to terminate the relationship.
Probationary Period: The probationary period is typically included in labor contracts, usually 1 to 6 months. During this period, either party can terminate the contract with less notice or severance pay.
3. Working Hours and Overtime
Standard Working Hours: The standard workweek in China is 40 hours, typically divided into 5 working days of 8 hours per day. Employees are generally entitled to at least 1 day off per week (usually on Sunday).
Overtime: If employees work beyond the standard 40 hours per week, they are entitled to overtime pay:
1.5 times the regular hourly rate for overtime on weekdays.
2 times the regular hourly rate for overtime on rest days.
3 times the regular hourly rate for overtime on public holidays.
Rest and Meal Breaks: Employees must be given at least 1 hour for lunch during a typical 8-hour working day, and sufficient time for rest if working longer hours.
4. Wages and Compensation
Minimum Wage: China has a provincial minimum wage system, with each province, municipality, or autonomous region determining its own minimum wage rates. These rates vary depending on the region and are reviewed periodically to keep up with inflation and the cost of living.
Wage Payments: Employers must pay wages at least once a month, and wages should be paid in local currency. The employer is also responsible for paying for statutory allowances, such as overtime or other work-related bonuses as stipulated by the labor contract.
Deductions: Employers are authorized to make statutory deductions from an employee’s salary, such as for personal income tax and social insurance contributions (e.g., pension, medical, unemployment, and work injury insurance). Any other deductions must be agreed upon by both the employer and employee.
Wage Protection: If an employer delays or fails to pay wages, employees have the right to file complaints with local labor authorities.
5. Leave and Holidays
Annual Leave: Employees who have worked for more than 1 year are entitled to 5 days of paid annual leave. This increases based on years of service:
5-10 years of service: 10 days of leave.
More than 10 years of service: 15 days of leave.
Public Holidays: China has several public holidays, including Chinese New Year, Labor Day (May 1), National Day (October 1), and Tomb Sweeping Day, among others. Employees are entitled to paid leave on these holidays. If they work on these days, they are entitled to overtime pay.
Sick Leave: Employees are entitled to sick leave, but the amount of paid leave depends on the length of employment and the employer’s policies. During sick leave, employees receive compensation that is a portion of their regular salary, and the length of paid sick leave is generally determined by a medical certificate.
Maternity and Paternity Leave:
Maternity Leave: Female employees are entitled to 98 days of paid maternity leave. This includes 15 days for prenatal care, 15 days post-natal, and the remaining days can be taken at the employee’s discretion.
Paternity Leave: Paternity leave varies by province, but in general, male employees are entitled to 3-7 days of paternity leave upon the birth of a child.
Family Care Leave: Certain provinces also provide additional leave for employees to care for sick family members, although this varies by jurisdiction.
6. Health and Safety
Workplace Safety: Employers are legally required to provide a safe and healthy working environment, including safety training, protective equipment, and procedures to mitigate occupational hazards.
Occupational Disease and Injury: If an employee is injured or becomes ill as a result of their work, they are entitled to workers' compensation, which covers medical costs, rehabilitation, and a portion of lost wages. Employees are also entitled to compensation if they suffer from an occupational disease.
Social Insurance: Employers are required to contribute to social insurance schemes for their employees, including pension, medical insurance, unemployment insurance, work injury insurance, and maternity insurance. These contributions vary by region but are generally shared between employers and employees.
7. Termination of Employment
Termination by Employer: An employer can terminate an employee's contract for reasons such as:
Serious misconduct (e.g., theft, fraud, violence).
Long-term incapacity due to illness or injury (subject to medical verification).
Economic layoffs or restructuring (subject to social compensation).
Termination by Employee: Employees are also entitled to terminate their contracts, but they must give advance notice to the employer. The notice period is typically:
3 days for probationary employees.
30 days for employees with more than 1 year of service.
Severance Pay: If an employee is terminated for reasons other than serious misconduct, they may be entitled to severance pay, which is generally 1 month’s salary for each year of service. For employees who have worked less than 1 year, compensation may be prorated.
Termination Without Cause: Employers who terminate an employee without cause (and without meeting legal requirements) may be required to compensate the employee with severance or additional financial support, depending on the circumstances.
8. Anti-Discrimination and Equality
Non-Discrimination: The law prohibits discrimination in the workplace based on factors such as gender, ethnicity, religion, and disability. However, the practical enforcement of these protections is sometimes inconsistent.
Equal Pay: Employers must provide equal pay for equal work, regardless of gender. However, pay gaps between men and women still exist in certain sectors.
Sexual Harassment: Sexual harassment in the workplace is prohibited by law, and employers are required to establish internal procedures for handling complaints.
9. Trade Unions and Collective Bargaining
Trade Unions: In China, the All-China Federation of Trade Unions (ACFTU) is the only legally recognized trade union organization. It represents workers' interests, but union membership is generally not as widespread or as active as in some other countries.
Collective Bargaining: Employees may engage in collective bargaining through their union representatives, though the legal framework for collective bargaining is still developing, and union activities are often closely monitored by the government.
Strikes: Strikes are officially prohibited in China, and there is limited space for labor protests, although there have been some in recent years. Workers’ rights to organize and engage in collective actions are tightly controlled.
10. Dispute Resolution
Labor Dispute Resolution: In the event of a labor dispute (e.g., wage disputes, wrongful termination), employees may file complaints with the Labor Dispute Arbitration Committees. These committees are responsible for resolving labor disputes before they reach the courts.
Mediation and Arbitration: Labor disputes must first go through mediation or arbitration. If the dispute is not resolved, it can be taken to the People’s Court.
Employment Rights Protection: Employees who believe their labor rights have been violated can seek redress through the appropriate labor authorities or courts.
Conclusion
Employment law in China provides a framework designed to protect workers' rights while promoting labor market flexibility. Key aspects of the law cover written labor contracts, working hours, wages, social insurance, occupational health and safety, and the termination of employment. However, enforcement of certain labor protections, such as anti-discrimination and labor rights, can vary based on location and specific circumstances.
Employers and employees must be aware of both national laws and local regulations, as Chinese employment law is subject to provincial variation.
RELATED Blog
0 comments