If you are thinking of starting a business in China then one of the important requirements is hiring the right employees and understanding different aspects around it.
It is important to understand all the details related to hiring and managing employees in China including legal aspects and other local regulations. We will have a brief look at some of these important points related to hiring employees in China.
Important aspects related to hiring employees in China
For you to legally hire the employees in China you need a Chinese company to do that. If you have your company registered in China then you are allowed to hire the employees directly. However, if you do not have the company registered then you would need to hire the employees using PEO service that is provided by Chinese employment agency.
There are different options that are available for hiring the staff in China. You can use an employment service/PEO for hiring employees or you can do it under WFOE. Alternatively you can also choose to hire employees under representation office RO.
Here it is worth noting that that office of Chinese representatives are not allowed to hire the employees directly. So the only option you have of hiring the employees is through licensed labor dispatch or PEO and through the employment agency that has all the information regarding local legal regulations.
Understanding what is EOR/PEO employment agency: PEO, also known as professional employment organization and in China it is called the labor dispatch or employee outsourcing service. For more information on employment and China PEO you can visit Jscgroups.com.
The foreign companies are able to hire staff in China via PEO agency without requiring the creation of legal entity in the country. When hiring employees you must have the Chinese registered company to sign the written contract of labor for each of the employees.
As far as the employee contract terms are concerned most of the employers tend to sign fixed term contracts with the employees. Here it is worth mentioning that when the contract gets renewed for third time, it gets converted into permanent contract. It is more common for the employees to sign 2 or 3 year contracts in China.
Structure of local labor contract in China: In China it is mandatory for you to write the labor contracts in Chinese and these contracts must include information such as company details – full name, address as well as legal representation amongst other things.
The employee information which includes full name, ID number as well as the address. The terms of employment contract, the position and the city of working, holidays, working hours, and the leaves. The salary package must include base salary, bonus and the health insurance policy. s
When you are hiring employees in China you must also be aware that there are five social insurances and one housing fund which come under the mandatory benefits.
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