1. Employment Contracts and Work Permits
According to the Exit and Entry Administration Law of the People’s Republic of China and the Labor Contract Law of the People’s Republic of China, foreign employees must obtain the necessary work permits and residence documentation before working in China.
Additionally, employers are required to sign written employment contracts with foreign employees, clearly outlining the rights, obligations, and responsibilities of both parties. Any changes to the employment contract must be mutually agreed upon and comply with China’s current labor laws and regulations.
2. Compensation, Benefits, and Social Insurance
Foreign employees in China are entitled to the same labor compensation and benefits as Chinese employees. Under the Social Insurance Law of the People’s Republic of China (revised in 2018), foreign employees must participate in the five main social insurance schemes: pension insurance, medical insurance, work injury insurance, unemployment insurance, and maternity insurance. Employers are also required to contribute to other welfare benefits, such as housing provident funds, on behalf of foreign employees.
3. Working Hours and Leave
Under the Labor Law of the People’s Republic of China (revised in 2018), foreign employees are protected by regulations on working hours, rest, and leave. Standard working hours should not exceed 8 hours per day and 40 hours per week. Overtime work must not harm the health of employees, and overtime pay must meet or exceed the legal standards. Additionally, foreign employees are entitled to statutory holidays, paid annual leave, and other leave entitlements.
4. Termination of Employment and Compensation
In the event of contract termination, foreign employees, like Chinese employees, have the right to receive economic compensation. The Labor Contract Law of the People’s Republic of China specifies the legal grounds for terminating employment contracts and the corresponding compensation standards. If an employer unlawfully terminates the employment contract, the foreign employee is entitled to claim compensation according to the law.
However, it's important to note that the compensation conditions for employers unilaterally terminating employment contracts in Shanghai differ from those in most other regions. According to the Regulations on the Administration of Employment of Foreigners in China and the Shanghai High People’s Court’s Interpretation on Labor Disputes, the basic rights of foreign employees in China—such as minimum wage, working hours, rest periods, labor safety, and social insurance—are governed by national laws.
For rights and obligations beyond these basic provisions, the autonomy of both parties should be fully respected. Therefore, if the employment contract does not specify compensation for unlawful contract termination, the employee may not be entitled to compensation.
This information is vital for both employers and foreign employees to understand, ensuring that both parties are protected under Chinese labor laws.
