Doing Business in China For Dummies®

Looking at Employees and the Law

Because China is still a communist country, it doesn’t offer employers the most flexible legal system for dealing with employees.

Under the current legal framework, local labor bureaus have a lot of power to enact and interpret employment laws and regulations. The government did enact a national labor law in 1994, but it leaves a lot of blanks for local governments to fill in. However, at the time of publication of this book, the Chinese government was circulating portions of various draft versions of a new national labor law. As the government received comments from businesses and employee groups, it did a good deal of redrafting. In general, although the new law should standardize some practices, many labor issues and interpretation of parts of the law will likely remain local.

This section discusses the current state of the law. We also mention some changes to the existing law that have been part of recent drafts. Keep in mind that these changes may be different when the law is finalized, so use the discussions on the draft law just to get a sense of the legal trends.

Employment law is changing rapidly and is oriented very locally, so don’t hire employees without first seeking legal advice.

Employment contracts

Expatriates may sign employment contracts with the FIE’s parent and then be seconded to the FIE, or they may contract directly with ...