10 Things to Consider while Signing an Employment Contract in China

Congratulations on your new job offer! Now it’s time to sign an employment contract with your employer to finalize your job offer. Before signing your employment contract, there are 10 important points you should look out for:

1. Types of Employment contact

There are 2 types of employment contract in China, so make sure to choose the right one that fits you well.

A fixed-term employment contract is an employment contract where the employer and the employee state an exact date of the expiration of the contract

A non-fixed-term contract is an employment contract where the employer and the employee don’t state any exact time of the expiration of the contract

2. Terms of Employment

When you are signing a contract, you should definitely be careful with the terms of employment. Many Chinese companies will hire you on a probation period which lasts from 1 to 6 months, which means that during this period, it’s relatively easy to terminate the contract without any punishments. On the other hand, if you have a fixed-term contract, it’s very difficult for the employer to fire you or the employee during the term of the contact.

3. Information about the company and YOU

You will need to make sure that the contract states the exact name of the company, address, name of the legal representative or a senior manager as party A. On the other hand, the contract should state your full name together with a valid address and identification number as party B.

4. Description of the job

The contract should state the full description of your job and the exact duties to be fulfilled to reach the goals set by the company.

5. Working visa

Any foreigner employed in China should obtain a valid working visa to work, so the contract should state whether the company will sponsor your working visa. It’s better to discuss about the working visa during the interview process. Make sure you are qualified to apply for the working visa as you will need to have at least 2 years of professional experience in your field or obtain a master’s degree from the top Chinese University. About the step to obtain working visa HERE

6. Salary Details

The contract should state the exact amount of salary you will receive each month. Make sure to check with the company about your net salary after tax, because Chinese companies tend to give you the amount of salary before tax. Moreover, the contract should state the exact date of the payroll each month. You will also need to check whether the company pays 13th month in salary, because it’s common for Chinese companies to pay 13th-month salary, typically before the Chinese New Year. If the company pays the 13th-month salary, then it should clearly specify on the contract. 

7. Bonus

Depending on the job position you hold, you will have different bonus systems. Therefore, if you have agreed on a bonus during the interview, it should clearly state on your employment contract.

8. Health Insurance

It’s very important to have good health insurance in China as it could be really costly for an expat to pay for the hospital expenses. So, you should check with your company whether they provide international insurance or local Chinese health insurance. International health insurance covers your expenses in the international departments of Chinese hospitals or International Hospitals, where all doctors and nurses can speak English. However, local Chinese health insurance only covers your expenses in local departments where doctors and nurses can hardly speak English. Thus, make sure the exact insurance is stated on the contract.

9. Vacation or annual leave

Depending on your work experience in China and the company you are working for, the annual leave days will vary. So, after your discussion with the employer, the vacation time should be specified in the contract.

10. Working hours

The contract should clearly state your working hours per week (for example, from 9 am to 5 pm, Monday to Friday). Also, make sure to discuss the paid overtime working. Most companies in China will pay you some reimbursements if you stay at work overtime.

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