HR Solutions & Employee Relations in China with IRIS

IRIS HR Consulting has experience helping businesses grow in China. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in China to help businesses hire, recruit, and pay staff overseas in new, unfamiliar countries. As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.

Take your business to China with IRIS HR Consultancy.

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    Global expansion in China

    Not only is it the most sizable country in terms of population, reaching over 300 cities, but its quickly growing consumer market and external investment (from familiar countries like the UK) has turned China into a desirable business destination.

    One of the more attractive features of a country is favourable government policies, where China is no stranger to delighting in foreign investment and striking valuable trade agreements and contracts. In particular, the government has been known to relish business with entrepreneurially supportive policy, extending to international companies.

    With such a population density, and a geographically-wide presence, the availability of skills is nearly unparalleled, creating an abundance of labour for business. The absent regulation in certain sectors has proven opportunistic for those experimenting in Asian markets, creating favourable conditions for new entrants.

    Lastly, a sense of stability and security in its economy has been attracting new and old investment. The last three decades have witnessed a boom in development, where China has outpaced many former global leaders to hold its high esteem as a promising industrial marketplace.

    A Guide to Employing Staff in China

    Everything you need to know about the employment laws and compliance requirements in this country


    Why China is Quickly Becoming the Ideal Business Destination

    From promising (and emerging) new markets, to its tried and tested reliability, and its currency stability, China is a key destination for many American investments. The favourable access to labor and lower tax rates, courtesy of a system that attracts foreign investment, means that China has outgrown its role as a talking point for businesses. Instead, it has become an opportunity to develop, expand, and experiment for those eager to enter new and exciting markets. 

    Establishing your business in China     

    Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.

    Before entering the Chinese market, you will need to honor labor regulations, which have tightened over the years. Establishing a business in China will require local knowledge – everything from selecting a favourable location, to PEOs (Employer of Record), to choosing the right legal structure and hiring your talent.

    Complying with these procedures can be easier when you partner with IRIS HR consultants – we can help you reach Chinese markets.


    Employment laws in China

    When first expanding your business into China, navigating local laws, legislation and rules of employment laws is no mean feat, especially if you’re unfamiliar with the country’s driving policies. Throughout Asia, these laws are almost never universal. Rather, employment is dynamic and reflects the countries social, economic, cultural opportunities.

    For example, a number of statutes define the minimum requirements with regard to employment which all employers in China must follow. Among these, the Labour Law of the People’s Republic of China (‘the Labour Law’) and the Labour Contract Law of the People’s Republic of China (‘the Labour Contract Law’) are the two most important ones to understand.

    Did you know?

    The two special administrative regions of Hong Kong and Macao are exempt from certain statues.

    Employment rights & contracts in China

    With the exception of part time employees (defined as those working under four-hour work days/ under 24-hours weekly), all employment contracts must be finalised in writing, signed by all parties concerned and supplied to the employee within one-month prior to commencing their role.

    The mandatory terms that must be formally captured in any contract, includes:

    • Name and address of the employer
    • Name and address – identity verified – of the employee
    • Duration of the contract
    • Details of the role and location
    • Workable hours, any breaks and holiday entitlements
    • Labor protection (i.e. health and safety matters) and labor conditions (i.e. the working environment) and protection against and prevention of occupational harm where applicable
    • Salary
    • Social security

    Hiring & recruitment in China  

    When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer and thereafter – including before, during and after the commencement of an employment contract.

    What are the working hours in China?

    As a standard, the maximum working hours are represented by eight daily working hours, or 40 hours weekly.

    Certain employees may be eligible for different hours under the “flexible working time system” and “comprehensively calculated working time system”, guided by the labour administrative department.

    Rest breaks, however, are not guided by regulations or supervisions.

    Overtime in China

    Overtime can only be requested upon consultation with trade unions and employees. Typically, overtime should not be in excess of an hour per day but may extend to three hours daily (against a maximum threshold of 36 hours monthly).

    On completion of work duties, an employee can anticipate pay at the following rate:

    • 150% of normal salary (when overtime is required on a working day);
    • 200% if the overtime if required on a rest day (and where no compensatory rest is offered);
    • 300% where the overtime is required on a statutory public holiday.

    Maternity Leave in China

    Employees are entitled to a total leave window of 98 days, which is delivered at 25 days prior to childbirth, and 83 days thereafter. In the scenario of complications, multiple childbirths, or if local legislation permits, then maternity leave periods can be extended.

    During maternity leave, employees can receive either full pay or maternity allowances – the higher of the two is, typically, offered.

    Vacation

    Any employee who has worked for one or more years of continued services is entitled to 5 days of paid vacation, increasing to 10 after 10 years of service, and 15 after 20 years.

    Sick Leave in China

    Depending on years of working experiences, and length of services, an employee can be entitled to a Medical Leave Period, ranging from 3 to 24 months.

    Public Holidays in China

    China recognises, and celebrates, 11 paid public national holidays, including:

    • New Year’s Day (1 January)
    • Spring Festival – 3 days
    • Tomb Sweeping Day
    • Labour Day (1 May)
    • Dragon Boat Festival
    • Mid-Autumn Festival
    • National Day (1, 2 and 3 October) – 3 days
    • Women’s Day (8 March) – half day for women only

    Retirement & pensions in China

    There are three principle categories recognised under the Old Age insurance system:

    • Basic old age pension
    • Enterprise Supplemental Old Age pension (voluntary occupational pension scheme), and
    • Individual savings-type old age pension.

    Employer contributions, for basic pension, are set at 20% against the total monthly wage payment, whereas the employee contribution stands at 8%. In areas where there is a high retirement rate, the employer contributions may exceed the capped 20% (for example, in Shanghai).

    We’ve Got You Covered

    Deliver your business to new, exciting markets with confidence and compliance.

    End of Service

    HR in China requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.

    For these more complicated matters, you will need expert HR guidance to navigate Chinese labor laws and remain compliant.

    Termination (including Severance) in China

    Contracts can be terminated for one of the following:

    • Automatic termination
    • Termination by the employee
    • Termination by the employer
    • Termination by mutual agreement

    For employer-related terminations, and governed by the labour Contract Law, employment can be concluded after conduct issues, working capacity, or economic reasons.

    On the conclusion of employment, the employer is obliged to offer compensation, calculated against the length of service.

    Industrial Relations

    The All-China Federation of Trade Unions, and its subsidiaries, is the only lawful (and recognised) trade union organisation in China, from which many employees working in China are affiliated.

    Trade unions consult, and are sometimes involved in, workplace matters, but have no rights regarding industrial action.


    Why Partner With IRIS?

    When entering new, exciting countries in Asia, like China, you will need an employment specialist to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.

    Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully compliant solution, IRIS can help businesses reach Asia, especially when they build bridges in China.

    Our cost-effective, knowledgeable approach to HR in China makes us an ideal partner to commence your overseas plans.