Policy Information

What procedures are required for legal employment

When it comes to the employment procedures for foreign nationals, their first reaction may be "employment permit" and "employment certificate".

According to the national regulations, from April 1, 2017, the "integration of two licenses" will be implemented, that is, for those who have worked in China for more than 90 days, they will no longer be issued with the Foreign Expert License (Foreign Expert Permit to China) and the Employment License (Foreigner Entry Employment Permit), and the Foreigner Work Permit Notice and the Foreigner Work Permit will be officially launched.

Which foreigners can be exempted from working permit for foreigners? There are mainly the following four categories of personnel: (1) foreign professional technology and management personnel directly funded by the Chinese government, or foreign professional technology and management personnel funded by state organs and institutions, who have senior technical titles or special skills qualification certificates confirmed by national or international authoritative technology management departments or industry associations, and who hold the Foreign Experts Certificate issued by the Foreign Experts Bureau;

(2) Foreign laborers who hold the Permit for Foreigners Engaging in Offshore Petroleum Operations in the People's Republic of China to engage in offshore petroleum operations, do not need to land, and have special skills;

(3) Foreigners who hold the Temporary Business Performance License to perform art performances for business with the approval of the Ministry of Culture;

(4) Foreigners holding Chinese Foreigner Permanent Residence Permit.

Application of law to employment of foreigners

Once a foreigner is legally employed in a domestic enterprise, according to the relevant provisions of the Regulations on the Administration of Employment of Foreigners in China, the enterprise shall sign a labor contract with the employed foreigner, and the term of the labor contract shall not exceed five years.

According to this provision, we can draw the following two conclusions: First, foreigners who have gone through employment procedures in accordance with the law establish a labor relationship with the employer, and the relevant labor laws and regulations of China should be applied according to the law, so the enterprise should sign a labor contract with the foreign countrymen within one month from the date of employment, otherwise the foreigner has the right to require the employer to bear the legal responsibility for not signing a labor contract.

Secondly, regarding the term of the labor contract. According to regulations, enterprises and employed foreigners shall conclude labor contracts according to law. The maximum term of a labor contract shall not exceed five years. The labor contract shall terminate upon expiration, but may be renewed after completing the approval procedures in accordance with Article 19 of this regulation.

Therefore, when foreigners establish labor relations with domestic enterprises and sign labor contracts, the types of labor contracts are limited to fixed term labor contracts with a term of no more than five years, and the provisions on unfixed term labor contracts are not applicable, nor are they applicable to labor contracts with a term of completing certain tasks.

In this regard, various provinces, cities and autonomous regions in China have different views, and very few of them recognize this law breaking agreement. For example, article 16 of the Shanghai Notice on Several Opinions on the Implementation of the Regulations on the Administration of Foreigners' Employment in China: the rights and obligations of both parties relating to the term of employment, position, remuneration, insurance, working hours, conditions for termination of employment relationship, liability for breach of contract, etc. between enterprises and foreigners who are allowed to be employed are agreed through labor contracts.

work overtime

Foreigners employed according to law also have the right to overtime pay if they work overtime outside the statutory working hours. According to national laws and regulations, foreigners who are employed according to law also apply to relevant national working hours. Therefore, for foreigners who are employed according to law, if they work beyond the statutory working hours, the enterprise shall pay overtime wages according to law.

social insurance

Foreigners should also pay social insurance according to law. The issue of foreigners' payment of social insurance has always been concerned by employers, but it has not been well implemented due to the disconnection between actual operation and legal provisions.

Before the implementation of the Social Insurance Law, it was very rare for employers to pay social insurance for foreigners, and most of them fulfilled their obligations through commercial insurance.

Article 97 of the Social Insurance Law stipulates that "Foreigners who are employed in China shall participate in social insurance with reference to the provisions of this Law", which for the first time stipulates the issue of compulsory payment of social insurance by foreigners.

Later, the Ministry of Human Resources and Social Security's Interim Measures for Foreigners Employed in China to Participate in Social Insurance further clarified that foreigners must pay social insurance.

The Measures also mention that individuals with the nationality of countries that have signed bilateral or multilateral agreements on social insurance with China, if employed within the territory of China, shall participate in social insurance in accordance with the provisions of the agreement. It should be noted that not only nationals of countries that have signed bilateral agreements on social insurance can be exempted from paying taxes if they work domestically. If the employee has not paid the corresponding social insurance in the country, or has exceeded the exemption period stipulated in the bilateral social insurance agreement, the employer still needs to pay social insurance for them in accordance with the law.

At present, China has signed bilateral agreements on social insurance with nine countries (Germany, South Korea, Denmark, Finland, Canada, Switzerland, the Netherlands, France, and Spain). When recruiting personnel from these countries, companies can refer to the corresponding agreement terms.

Rest and vacation

Foreigners who work in the employing units according to law shall enjoy the right to rest and leave as prescribed by national laws and regulations. This means that foreigners also enjoy annual leave, statutory holidays, marriage leave, maternity leave and other statutory holidays.

Minimum wage

For foreigners who are employed by employing enterprises according to law, the wage standard after providing normal labor shall not be lower than the local minimum wage standard.

Can foreign employees terminate their labor contracts when they reach retirement age?

Based on the actual local situation. According to the provisions of the Labor Contract Law, the labor contract shall terminate when the employee reaches the statutory retirement age (currently the standard is 60 years old for male employees and 50 years old for female employees) or begins to enjoy pension benefits. But if foreign employees reach the retirement age stipulated by Chinese law, can the company terminate the labor contract? The Shanghai court once held that the provisions of Shanghai did not prohibit foreigners who reached the statutory retirement age from continuing to work in this city. The Beijing court believes that the company can terminate the labor contract of foreign employees on the grounds that they have reached the legal retirement age in China, without paying any economic compensation.

Can companies renew open-ended labor contracts with foreign employees?

The Labor Contract Law stipulates that after the same employer and employee have signed two consecutive fixed-term labor contracts, when renewing the contract again, an open-ended labor contract should be signed. However, the question of whether employees can request to sign open-ended labor contracts with foreign employees in the same company after signing two consecutive fixed-term labor contracts varies in different regions. Regional interpretation shall prevail.

First of all, according to the Regulations on the Administration of Foreigners' Employment in China, the term of a foreign-related labor contract shall not exceed five years, and the labor contract shall terminate upon expiration. Both parties may renew the labor contract after completing the examination and approval procedures for the employment of foreigners.

How to deal with a company refusing to issue a resignation certificate to foreign employees?

Approval from the administrative department. The main body of application for approval is the new employer. The approval materials include but are not limited to the resignation certificate and the cancellation form of Foreigner's Work Permit, which are issued by the original employer. If the original employer does not cooperate in issuing the work permit, the foreign employee's work permit will not be able to be changed smoothly and they will not be able to legally participate in labor in China. Foreign employees can resolve the issue through complaints or litigation, and the company will bear any losses incurred as a result.