Hiring employees through a PEO agency in China is becoming increasingly popular among international investors looking to start a business in China . How to recruiting in China simply and in a compliant manner is a critical issue for international investors who do not have a legal entity in China or who are in the process of establishing China WFOE. This problem can be solved by a PEO in China under employment outsourcing, which can assist international companies in employing staff in China prior to establishing a company in China.

If you are unfamiliar with China’s PEO or EOR, the following two articles will be of assistance to you.

What is China PEO & China EOR? How does it work in China?

How to Hire Employees In China Without Legal Entity?

If you already have a basic understanding of China PEO and EOR, the following 5 stages for hiring a PEO in China can help you onboard your first employee quickly and easily.

Contents:

Step 1: Select a local PEO in China

Step 2: Prepare Employee On boarding Information and Documents

Step 3: Review local employment contract

Step 4: Understand China payroll and monthly hiring cost

Step 5: Pay On time. Employee onboard through PEO in China

Step 1: Select a local PEO in China

In China, there are many PEO vendors with various names, such as EOR vendors, employment outsourcing agencies, employee outsourcing service providers, recruiting agencies, and so on. You can also find foreign PEO in China, state owned service provider, or local private service provider.

Given the complexities of China’s local employment policies, payroll, and benefits regulations, a local PEO service provider is more recommended because they are more familiar with the local policies and have more local resources and knowledge to assist you in completing the employer liability and handling potential labor disputes. In the meanwhile, local service provider is hiring in Chinese employee under their own legal entity, and handle employee’s payroll and social security themselves which also ensure the efficiency and speed of response, while there are many foreign PEO service providers who actually outsource or subcontract the PEO employees to the local service provider. As a result, it’s critical to select a PEO in China who runs their own operation and business locally.

Here are some helpful hints for choosing a competent PEO vendor in China.

• Select a Chinese service provider who can hire employees directly.
• Examine the PEO vendor’s provincial and city coverage and choose the one with the most.
• Review the PEO vendor’s labor conflict history and choose the one with the fewest labor disputes.
• Choose a local PEO in China with extensive experience working with global enterprises in China.
• Examine the service contract and China labor contract template that the PEO in China will sign with the PEO employee, and choose the one that offers multilingual agreements.
• Examine the China PEO vendor’s flexibility in terms of salary pay dates and payment dates. Choose the one with the most versatility.
• Examine the extent of services provided by the China PEO vendor.

Step 2：Prepare Employee On boarding Information and Documents

Based on the above recommendations, you should find a qualified China PEO service provider. It is critical to explain the PEO and EOR employment models to your Chinese employee. Because employees may verify the company’s background and records online, choosing a reputable local service provider is critical. Your employees will be more inclined to work for a reputable PEO in China.

Following initial alignment with your PEO employee in China, you will begin gathering on boarding information and documentation from your employee, which will be utilized mostly for payroll processing, local labor contract preparation, and mandatory benefits contribution.

Although different cities in China may require different paperwork, the general information and documentation required for on-boarding a PEO or EOR employee in China are included below.

• Employee personal information includes full name, social security number, home address, phone number, bank account information, marital status, nationality, and current social security status, among other things.
• Employment details including employee salary in China, on-boarding date, working city, social security contribution city, position, probation period, monthly gross compensation, annual leaves, and other benefits, among other things.
• A copy of your ID card
• Copy of your bank account
• Employee page in Hukou book
• Previous employer’s termination certificate

Step 3: Review local labor contract template

Your PEO vendor in China will sign China local labor contract with your employees in China as the employer of record. It will be the responsibility of the China PEO vendor to produce a local labor contract based on the personal information and employment details provided by you. The labor contract of a China PEO vendor is usually a generic form that covers all of the required terms and circumstances for hiring employees in China.

Although labor contracts in China must be written in Chinese, you will need a bilingual (Chinese and English) local employment contract to fully comprehend the terms and conditions.

It is strongly recommended that you check the provisions of the labor contract given below to guarantee that both your business in China and your employee’s benefits are protected under such an employment contract.

• Employee’s salary and benefits
• China Leaves and China holidays
• Confidentiality
• Work duties
• Intelligence Property

Many multinational companies prefer to incorporate their global policies, terms, and conditions into their employee contracts in China; nevertheless, this is not recommended. The best option is to provide the terms and conditions to your chosen China PEO service provider, who will then evaluate and change the terms to verify that they are all in conformity with Chinese laws.

Step 4: Understand China Salary and monthly hiring cost

Although it is difficult for foreign investors to fully understand China payroll and China salary calculation due to the complexity of local policies in China, it is nevertheless critical that you have a general understanding of the employment cost structure in China. You can also request a quick training on China payroll and how your employee’s salary is computed from your China PEO vendor.

Understand more about China salary and China average salary, read. Complete Guide on Salary in China 2022 [Average Salary in China]

Here is one article for that can help you to understand. How to Calculate Employee Salary in China? [China Payroll Guide].

To sum up the most essential payroll and labor cost advice in China,

1. China salary shall be paid monthly.
2. Instead of a net pay, offer a monthly gross salary.
3. Employee gross monthly wage – Personal tax – Employee social security contribution= Employee net monthly salary
4. Monthly employment and recruiting cost = Employee monthly gross wage + Employer social security contribution
5. Salary for the 13th month is optional. It becomes necessary, however, if it is included in the labor contract.
6. The basis and percentage of contributions to social security vary by city.
7. Social security contribution base is adjusted yearly.

Step 5: Pay On-time. Employee onboard through PEO in China

The last step is very simple but extreme important. Remember to pay your China PEO service provider on-time so that the PEO in China can release the salary to your employee on-time and contribute their local tax, social insurance and housing fund on time and in full.

Considering the foreign currency control in China, usually it takes 5 days to receive the payment from overseas to China. If your employee pay date is on last working day of each month, it is safe to pay your PEO in China around 20th of each month. The date will vary depending on local holidays and holidays in your native country, such as Chinese New Year (January, February), China National Holiday (October), and Christmas (Dec).

Hiring employees in China through a China PEO service provider is a simple and legal way to start a business in China without having to set up a corporation. The first and most critical step is to find a reputable PEO provider in China.

Please contact us if you require any other information on China PEO.

Info@jscgroups.com

China labor dispatch also named as China EOR(Employer of Record), China PEO, China Employment, China Employee Leasing, China employee outsourcing refers to the practice of hiring or outsourced employees through an employment agency in China. Under China labor dispatch and China EOR/PEO service, your employees in China would be hired by Chinese employment agency, while employees are outsourced, managed and worked by the client in China, China employment agency/China EOR agency will act as the employer of record in China to handle all employment procedures, monthly China payroll, China individual income tax, mandatory benefits(China social securities, and off-boarding issues based on the regulations in China.

China labor dispatch service or China EOR/ PEO solution are commonly used under the situation where foreign investors have no legal entity in China or only has a representative office in China but would like to hire Chinese employees working for them in China to test and try the China market. In this case, the China labor dispatch or China employment agency will hire the employees in China selected by foreign investors. Under more on How to Hire Employees in China Without Legal Entity.

In China, there is a specific law and regulations to labor dispatch service and hiring practices in China, called The Interim Provisions on Labor Dispatch. The Interim Provisions on Labor Dispatch, which were discussed and adopted at the Ministry of Human Resources and Social Security’s 21st executive meeting are issued and become effective on March 1, 2013. Below are the detailed terms of the China Interim Provisions on Labor Dispatch.

Contents

• General Provisions of Labor Dispatch in China
• Scope and Number of Employment under Labor Dispatch in China
• Type of employees can be hired under labor dispatched service
• Number of employees can be hired under labor dispatch service in China
• Conclusion and performance of a labor contract/labor dispatch agreement
• Employment Contract Period for Dispatched Employee
• China Labor Dispatch Employment Contract Terms & Conditions
• Probationary Period of PEO Employees in China
• Obligations of the labor dispatch service provider in China
• Dispatched employees under work-related injury in China
• Situations employee can return PEO employees to the labor dispatch service provider in China
• Dissolution and termination of a dispatch labor contract in China
• Notice Period of dispatched employee to terminate the labor contract
• PEO agency in China terminate labor contract with dispatched employees
• Social security insurance for labor dispatched employees
• Hiring employees through China PEO agency for China Representative Office

General Provisions of Labor Dispatch in China

The Interim Provisions on Labor Dispatch (hereinafter referred to as the Provisions) re hereby developed in accordance with the Labor Contract Law of the People’s Republic of China (hereinafter the Labor Contract Law), Implementation Regulations for the Labor Contract Law of the People’s Republic of China (hereinafter the “Implementation Regulations”) and other applicable laws and administrative regulations in order to control labor dispatch practices, protect employees’ lawful rights and interests, and foster the development of a harmonious and stable employee relationship.

The provisions apply to China labor dispatch services supplied by a labor dispatch service provider or China employer of record agency, as well as a company’s employment of dispatched employees (hereinafter referred to as an employer). The provisions also apply to the employment of dispatched employees(also named EOR/PEO employees, outsourced employees) by a partnership, such as an accounting firm or a law firm that is incorporated by law, a foundation, or a private non-profit organization.

Scope and Number of Employment under Labor Dispatch in China

Type of employees can be hired under China labor dispatched service.

If you already have a company in China, only temporary, auxiliary, or substitute employment jobs are able to be hired under China labor dispatch service or China EOR/PEO employment in China.

Temporary job position is the one that lasts no more than 6 months.

Auxiliary job position is the one that is not part of the main business but provides services to the main business.

Substitute job position is the one that can be filled by other employees if the current employees are unable to work in a certain period like pregnancy, long time sick leave.

Before an employer in China decides on an auxiliary position in which dispatched employees will work, its employees’ congress or all employees must hold discussions and provide proposals and opinions, and the employer must negotiate on an equal footing with the labor union or employees’ representatives, and the issues must be announced internally.

Number of employees can be hired under labor dispatch service in China

The number of dispatched employees in China hired by an employer must be kept under rigorous control, and must not exceed 10% of the total number of employees in China.

The total number of employees in the preceding paragraph refers to the sum of the number of employees with a labor contract with the employer and the number of outsourced employees employed by the company in China.

This restrictions apply to the client who has no legal entity established in China.

Conclusion and performance of a China labor contract/labor dispatch agreement

Employment Contract Period for Dispatched Employee in China

By law, the China labor dispatch service provider shall sign a formal written labor contract with the employees who will be dispatched and hired in China for a minimum of 2 years.

China Labor Dispatch Employment Contract Terms & Conditions

China labor dispatch employment contract shall specify the following:

• Title and nature of the job position in which the dispatched employee will be hired in China.
• Job location in China.
• Number of the dispatched employee and the dispatch period in China.
• Amount and payment method of employee remuneration determined in accordance with the “equal work, equal pay” principle.
• Amount and payment method of social securities.
• Working hours, vocation & leave.
• Related benefits for the dispatched employees during work injury, birth-giving or illness.
• Occupational safety &hygiene and training.
• Expenses such as economic compensation.
• Term of the labor dispatch agreement.
• Payment method and criteria of the labor dispatch service fee.
• Liability for breach of the labor dispatch agreement.
• Other matters that shall be included in the labor dispatch agreement as set forth in the laws, regulations and rules.

Probationary Period of EOR/PEO Employees in China

The labor dispatch service provider or China EOR/PEO & employment agency and the employee may agree to be sent throughout the probationary term as required by law. It may, however, agree to a single probationary period with the same employee who will only be dispatched once.

Obligations of the labor dispatch service provider in China

China employment agency shall perform the following obligations for the employees hired in China under China labor dispatch and China employment service:

• In a genuine manner, inform the dispatched employees of the matters mentioned in Article 8 of the Labor Contract Law, the laws and regulations that must be followed, and the contents of the labor dispatch agreement.
• Establish training procedures to educate and deliver pre-service training and safety education to dispatched staff.
• Pay salary to outsourced employees and other benefits like China annual leaves, public holidays in accordance with the requirements of the State and the labor dispatch agreement by law.
• Pay China social security contributions and fulfill social security insurance and housing fund formalities for dispatched personnel in compliance with state and labor dispatch agreement regulations.
• Demand that the employer offer labor protection and other legal occupational safety and hygiene conditions to the dispatched employees.
• Provide legal proof of a labor contract’s dissolution or termination.
• Assist in the resolution of a conflict between dispatched employees and the employer.

Dispatched employees under work-related injury in China

If a China labor dispatch service provider’s employee is hurt on the job while working for an employer, the China labor dispatch service provider must apply for a legal determination of job injury, and the employer must cooperate in the investigation/verification for the purpose of determining job injury. Both of the PEO/EOR agency in China and employer shall bear the liabilities for such work-related injury.

If a PEO/EOR employee in China requests a diagnosis and/or assessment of an occupational disease, the employer is responsible for handling all aspects of the diagnosis and/or assessment of the occupational disease and provide the documents such as the China EOR/PEO employees occupational history, history of exposure to the occupational disease and test results of hazardous factors at workplace for the occupational diseases that are necessary for the diagnosis and/or assessment of the occupational disease in a truthful manner, and the China labor dispatch service provider shall provide the dispatched employee with other materials necessary for the diagnosis and/or assessment of the occupational disease.

If a labor dispatch service provider’s administrative license is not renewed when it expires, or if its labor dispatch service license is revoked or rescinded, the labor contract currently in place with its dispatched employees must be fulfilled until the law expires. Negotiations by both parties to a work contract may result in the labor contract being dissolved.

Situations employee can return EOR/PEO employees to the labor dispatch service provider in China:

Under any of the following circumstances, an employer in China may return a dispatched employee to the China labor dispatch service provider concerned:

• The employer is subject to the conditions set forth in Item 3, Articles 40 and 41 of the Labor Contract Law.
• The employer is declared bankrupt, has its business license revoked, or has been compelled by law to close or cancel registration; and the employer decides to dissolve in advance or not to continue the business after the business period expires.
• The labor dispatch agreement is terminated upon expiry.
• The labor dispatch service provider must pay salary to the outsourced employee on a monthly basis, at least in compliance with the minimum salary determined by each local government, during the period when the dispatched employee has no employment after being returned.

Dissolution and termination of a dispatch labor contract in China

Notice Period of China dispatched employee to terminate the labor contract

A dispatched employee can terminate his or her labor contract with its China employment agency by giving 30 days’ notice in writing. During the probation period, he/she may terminate its labor contract with a labor dispatch service provider by giving 3 days’ written notice. The labor dispatch service providers must notify the relevant employer of the dispatched employee’s notification.

PEO/EOR agency in China terminate labor contract with dispatched employees

If an employer returns a dispatched employee in accordance with Article 12 of the Provisions, the labor dispatch service provider may dissolve the labor contract with the dispatched employee if the EOR/PEO employee who is to be re-dispatched does not agree with the labor dispatch service provider to maintain or improve the labor contract conditions.

If an employer returns a dispatched employee in accordance with Article 12 of the Provisions, the labor dispatch service provider concerned may not dissolve the labor contract with the dispatched employee if the dispatched employee to be re-dispatched does not agree with the labor dispatch service provider to reduce the conditions specified in the labor contract except where the labor dispatch service provider agrees to decrease the conditions specified in the labor contract.

The labor contract between a China PEO agency and a dispatched employee is terminated when the labor dispatch service provider is declared bankrupt, has its business license revoked, or has been ordered by law to close down or cancel registration, or when the labor dispatch service provider decides to dissolve in advance or not to continue the business after the business period has expired. Negotiations between the employer and the employee are required.

In the event that a labor dispatch service provider dissolves or terminates its labor contract with a dispatched employee pursuant to Article 46 of the Labor Contract Law or Article 15, 16 of the Provisions, it shall provide the dispatched employee with economic compensation.

Social security insurance for China labor dispatched employees

If a labor dispatch service provider in one region deploys an employee to another region, the dispatched employee must be covered by social security insurance in the location where the employer is located. China dispatched employee is entitled to social security insurance benefits in accordance with local requirements, and the China employment agency is responsible for paying the social security insurance premium in accordance with the rules in the location where the employee is based.

If a labor dispatch service provider dispatching an employee to an employer has established a branch in the employer’s location, the branch must complete the requirements for getting social security insurance coverage and pay the dispatched employee’s social security insurance premium.

Hiring employees through China EOR/PEO agency for China Representative Office

Representative office in China are not allowed to hire employees working for them directly. The only compliance option for rep office in China to hiring employees are through China EOR/PEO agency of China labor dispatch service.

The employ of dispatched employees by the permanent representative office of a foreign enterprise or by the representative office of a foreign financial institution in China as well as the employ of international oceangoing seamen by a seamen employer in the form of labor dispatch is exempted from the restrictions on the proportion of dispatched employees employed for temporary, auxiliary, or substitute job positions.

China Labor Dispatch & Employment for Foreign Startups in China

For foreign investors who would like to start doing business in China, hiring employees under the labor dispatch which is also called China EOR/PEO mode is very smart to test the China market without the great spent and efforts. After running business for months, foreign investor can start on registering a company in China.

For foreign investors who want to hire employee in China, preparing a localize comprehensive China labor contract is extreme important to ensure their hiring and employment in China is compliance, and reduce the labor dispute. Given the complexities of China’s labor laws, foreign investors can find it difficult to comprehend how to draft a good employment contract in China.

This article gives you a comprehensive guide on drafting a China labor contract when hiring in China.

Who can sign the China labor contract with the employee?

Only registered company in China can hire employee in China and sign China labor contract with employees working for you in China. If foreign investors have no legal entity to sign with the local employees in China. Foreign investor can engage China EOR/PEO and employee outsourcing service through the PEO/EOR agency in China to legally hire employee in China. For more find more details on how to hire employees in China without a legal entity.

Is it necessary sign a written employment contract in China with my employees in China?

To hire local Chinese employees in China, utilizing an e-signed employment contract offers convenience and feasibility for both employers and employees in China. However, it is crucial for employers to select a licensed e-signature agency in China to ensure the validity of the signed China labor contract in accordance with local regulations in China.

For hiring foreign employees in China, we highly suggest to keep a written employment contract. Especially for foreign employees working in China, written China labor contract is required when applying the work visa. Both employer and employee shall keep an original copy of the employment contract.

China Labor Contract Types

According to Article 18 and Article 19 of “Regulations on the Implementation of the Labor Contract Law of the People’s Republic of China”, (Labor Contract Law of the People’s Republic of China (www.gov.cn))there are three types of China labor contract depending on how the term is defined.

1. Fixed-term China labor contract

It is point to the China labor contract that both employer and employee agree on the time of contract termination. An employer and employee in China may conclude a fixed term China labor contract upon reaching a consensus through consultation.

2. Open-ended China labor contract

After two times of fixed-term contracts renewal in China, employer in China is obliged to offer an open-ended contract with employee on the third time when renew the employment contract with employee in China.

3. Job Contract – Employment contract for the duration of a project or task

Also named project employment contract in China, namely does not have fixed period, in order to complete a certain task for the term of China labor contract, both employer and employee agree on the completion of a certain project or task as the term of the contract of labor contract.

If employee is hired under China labor dispatch mode through an China employment agency in China, the employment agency in China shall sign a dispatched labor contract with the employee in China.

Mandatory clauses when drafting a China labor contract

Article 19 of the Labor Law(Labour Law of the People’s Republic of China – (mofcom.gov.cn)) stipulates that the legal form of China labor contract is written form, and there are 7 necessary clauses:

1. Basic information in China labor contract

Company full name, address, name of the legal representative or a senior manager.

Employee’s full name, as well as a valid address and identification number;

Employee on-boarding date;

2. Term of China labor contract

As introduced above, there are three types of labor contract term employee can choose when hiring employee in China base on each employee’s actual work condition.

3. Contents of work

Employer shall mention employee’s job title and job descriptions in the China labor contract.

4. Labor protection and working conditions

Both employee and employer shall agree on the working hours, holidays, annual leaves, working location in China. Employer shall base on different job duties arrange different work conditions to ensure employees’ work safety in China.

5. Employee remuneration & Compensation in China

This necessary clause may stipulate salary in China, overtime salary, bonus, allowance, commission, amount of subsidy, statutory benefits(China social security) contribution, payment time and payment method, annual leaves, etc.

6. Company disciplines & regulations

This clause shall include the rules and regulations formulated by the employer like public holidays and leaves in China, which may be briefly agreed upon by combing the internal rules and regulations into employee handbook and attached as an appendix to the employment contract in China.

7. Conditions for the termination of employment contract in China

This requirement is usually in open-ended employment contracts, which do not have a time limit for termination.

8. Responsibility for the violation of a China labor contract.

There are two forms of liability for breach of employment contract in China. The first is that one party’s compensation for breach of contract causes economic loss to the other party, that is, the way of compensation for loss. The second is to agree on the calculation method of liquidated damages. When adopting the liquidated damages method, attention should be paid to the specific amount agreed according to the bearing capacity of one party of employees, so as to avoid the situation of obvious unfairness.

Apart from the mandatory clauses listed above, other terms in a labor contract also suggested to include in the labor contract.

Recommended clauses when drafting employment contract in China.

Probation period and requirements for passing the probation period.

Non-competition clauses.

Confidentiality clauses.

Other benefits like housing, commercial insurance, expense claims.

What will happen if employer fail to sign employment contract with employee on-time?

Where employer fails to conclude a China labor contract with employee within one month but less than one year from the date of employment in China, employer shall compensate employee twice the monthly salary.

If employer does not conclude a labor contract with the employee after one year from the date of employment in China, it shall be deemed that the employer and employee have concluded a permanent employment contract in China.

China Probation Period

Employer can set probation period in employment contract in China. Employees’ salary during probationary period cannot lower than 80% of the salary after the probation period. Below are the China probation period employer can set base on employee’s employment contract term agreed in the employment contract in China.

Employer can only set one time probation period for each employee in China. For the employees who are under a project-based employment contract in China or the labor contract term that is less than three months, probation period cannot be set.

Notice Period for Terminating the Employment Contract in China

In China, if an employee wishes to resign from his or her job, he or she must send a 30-day written notice to the employer in China. If the employee is on probation, only three days’ notice is needed to give the employer notice of the resignation.

In certain cases, if employer can unilaterally terminate an employment contract with employee, employer shall notice employee 30 days’ written notice in advance for such termination or giving employee one month’s salary in lieu of notice.

China Labor Contract Amendment

The contents of the China labor contract can be modified in writing after both employer and employee agreed and reached a consensus through mutual negotiation.

Other Tips of Doing Business in China

Doing business in China or hire employee in China for foreign companies is not easy because of the local policy complexity. It’s very important for foreign companies to learn different information of hiring employees in China and doing business in China. Here are some of the good websites which are very useful for foreign companies to use when working and living in China.

China Labor Contract Template

If you want to get a China labor contract template, please send email to info@jscgroups.com.

For foreign companies doing business and hiring employees in China, select and hiring the right candidates easily and quickly is very important. In China, there are more than one thousand online recruitment platforms in use. It is also very important to choose a suitable website for their own enterprise recruitment among these websites. JSC as the leading China recruitment agency will introduce the best job portals in China among foreign companies.

1. Best Job Portals in China – 智联招聘 Zhaopin

Website: https://www.zhaopin.com/

Year of Establishment: 1994

Position Level: Entry to Middle Level

Chinese Legal Entity Required: Yes

App: Available

Coverage: Mainland China

Legal Entity Requirement: A company in China is required.

Zhaopin, founded in 1994, is one of the oldest online job portals in China. Zhaopin has 230 million employee users and has accumulated 6.16 million enterprises using their service when hiring in China.

Zhaopin offers one-stop recruitment services for large corporations and rapidly growing SMEs, covering online recruitment, campus recruitment, headhunting services, newspaper recruitment services, recruitment partner (RC service), corporate training, and talent evaluation in China.

As one of the most popular job portals in China, users are divided into three categories: students, white-collar employees, and high-end professions. In terms of the product, it includes everything from assessment to recruitment to education and training in order to achieve a closed loop service; in terms of platforms, it includes PC, smartphone, and offline terminals.

Zhaopin is China’s first and longest-running online job portals in China. Its large user base generates a large amount of data. Zhaopin provides a plethora of relevant positions for job seekers by comparing big data and utilizing AI assistance when hiring in China.

2. Best Job Portals in China – 前程无忧 51Job

Webiste: https://www.51job.com/

Year of Establishment: 1999

Position Level: Entry to Middle Level

Chinese Legal Entity Required: Yes

App: Available

Coverage: Mainland China

Legal Entity Requirement: A company in China is required.

51job is a comprehensive online recruitment website and job portals in China that has been in operation in China for a long time. There are more company users and individual job seeker users, with a wider coverage of the cities in China; its field and scope are also broad, with low salary, high salary, internship, and social recruitment. 51job was the first Chinese recruitment service company to be listed on the NASDAQ in the United States in September 2004.

51job combines the benefits of various media resources. It combines traditional media, network media, and advanced information technology with an experienced team of professional consultants to provide a full range of professional human resources services such as recruitment headhunting, training evaluation, and so on in China. The service now is covering more than 25 cities across China.

The goals of 51job are twofold as job portals in China: to provide better career development opportunities for motivated white-collar employees and professionals, and to provide better career development opportunities for motivated blue-collar workers and professionals. At the same time, the website is dedicated to locating and hiring the best talent for the company in China.

3. Best Job Portals in China – BOSS直聘

Website: www.zhipin.com/

Year of Establishment: 2014

Position Level: Fresh graduate, junior position

Chinese Legal Entity Required: Yes

App: Available

Coverage: Mainland China

Legal Entity Requirement: A company in China is required.

BOSS Zhipin is the world’s first online recruitment product in the “Direct Recruitment” mode available on the Internet, is also one of the best internet based job portals in China. Since its inception in July 2014, it has served over 120 million users and is dedicated to using technology to solve professional problems.

“Direct chat + accurate matching” is at the heart of BOSS Zhipin direct recruitment products. Candidates can communicate directly with employers by introducing an online chat function into the recruitment scene, bypassing the traditional lengthy recruitment process and improving communication efficiency. Simultaneously, BOSS Zhipin uses recommendation as the technical selection of products and applies cutting-edge technologies such as artificial intelligence and big data to improve the precision of matching between employers and talents in China, shorten the time of job hunting and recruitment, and thus improve job hunting and recruitment efficiency and performance of job portals in China.

4. Best Job Portals in China – 猎聘Liepin

Website: https://www.liepin.com/

Year of Establishment: 2011

Position Level: Senior to high level positions

Chinese Legal Entity Required: Yes

App: Available

Coverage: Mainland China

Legal Entity Requirement: A company in China is required.

Liepin, which debuted in 2011, is a middle and high-end job portals in China where enterprises, headhunters, and professional managers and employees can interact. Liepin has always been focused on developing a career development platform with managers’ personal user experience at its core, completely transforming the traditional online recruitment advertising platform with enterprises as the core.

In May 2019, the number of registered users on Liepin.com surpassed 50 million, and it served over 500,000 high-quality businesses. Liepin’s platform currently has over 250,000 headhunters looking for candidates for key positions. Liepin’s business has expanded to more than ten Chinese cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Dalian, Hangzhou, Nanjing, Wuhan, Xiamen, Chengdu, Qingdao, Chongqing, Zhengzhou, etc.

Liepin’s main selling points are as follows:

1. Search for high-paying jobs whenever and wherever you want.

2. Accurate real-time position recommendation

3. Interact in real time with professional headhunters

4. Concentrate on headhunters to increase your opportunities.

5. Comprehensive privacy safeguards make job-hopping safer.

5.Best Job Portals in China – LinkedIn

Website: www.linkedin.com

Year of Establishment: 2003

Position Level: Senior to high level positions

Chinese Legal Entity Required: No

App: Available

Coverage: Globally

Legal Entity Requirement: No need legal entity in China.

LinkedIn, launched in May 2003, is a professional networking platform based in Sunnyvale, California, USA. The company was listed on the New York Stock Exchange on May 20, 2011. On February 25, 2014, the simplified Chinese version of LinkedIn website was officially launched in China, and the Chinese name was announced as “领英”.

The site’s goal is for registered users to keep in touch with people they know and trust through their business contacts, known as “networks.” Users can add people they know to a “Connections” circle. As of May 2020, the total number of LinkedIn users has reached more than 690 million, with more than 50 million users in China.

Thanks to its huge active user base globally, LinkedIn is promised to enterprise to find the right candidates fast and efficient. As LinkedIn stated in their recruitment page:

690M+ active members on LinkedIn and growing every day

90% of LinkedIn members are open to the right job opportunity.

95% of Fortune 500 companies used LinkedIn Talent Solutions in 2018

It will be very convenient for corporate users to post jobs, headhunters to search for candidates, and individuals looking for work to easily access the platform. Different users can purchase different plans through LinkedIn based on their own needs to expedite the process.

How can I choose the Job Portals in China?

Company shall choose the job portals in China based on different position type and level. Below are our insights when hiring in China.

If you’re looking to hire senior managers or employees who speak English well, LinkedIn and Liepin are your best bets.

If you’re looking to hire new graduates or entry-level employees, BOSS zhipin might be a better fit.

If you’re looking for junior or senior employees whose English isn’t up to par, Zhaopin or 51job may be more useful.

How to search candidates and hire employees in China without a legal entity?

As introduced above, except for LinkedIn, all of the other four job portals in China required a Chinese entity to be registered as a corporate member in order to post the job.

If you are new to the China market and want to taste the China market without establishing a company in the early stages, you will be unable to find candidates through these job portals in China. You have the option of searching for the candidate on LinkedIn, through your own connections, or through a China recruitment agency like JSC.

After you have identified the right candidates, you shall also engage a China PEO and employment agency to legally hire the employees and sign the labor contract.

If you want to invest and start a business in the China market, or if you want to start hiring employees in China. All of the following tips and practices are critical for you to learn before hiring in China.

Contents:

• You need a Chinese company to legally hire employees in China.
• Different options for hiring staff in China.
• Understanding what is a China PEO/ China EOR employment agency in China.
• Oral employment contact in China is not allowed.
• Employment contract term in China.
• Structure of the local labor contract in China.
• Mandatory Benefits: Social insurance and housing fund in China.
• Ways to contribute the social benefits (mandatory benefits) of my employees in China.
• Popular job portals in China for searching the candidates.
• Employers are required to declare their employees’ individual income tax monthly.
• Normal salary structure/offer package in China
• Structure of Payroll Cost of Hiring Employees in China
• Annual leave policies in China
• Public holidays employees can take in China
• Probation period for employees
• Annual bonus is not mandatory in China
• How to hire foreign employees in China?
• Understanding the severance payment in China to terminate employment relationship.
• Notice period for terminate the employment relationship.
• You don’t need to pay severance payment if employee resigned.
• Employee background check & Criminal check.
• Offer extra benefits to your employees in China.

1. You need a Chinese company to legally hire employees in China.

If you already have a registered company in China, you can hire employees directly. If you do not have a company in China, you can hire employees through a China PEO or China EOR service provided by a Chinese employment agency.

2. Different options for hiring staff in China.

• Use a China PEO/employment service to hire employees in China.

  If you do not have a legal entity in China, this is the only compliance way to hiring employees in China working for you. Understand more regarding how to hire employee without a legal entity in China and 9 Tips of Hiring in China – China Employer of Record.
• Hiring employees in China under your China WFOE.
  If you have already established a WFOE in China, you can sign the China labor contract and hiring employees in China directly. You have the option of handling their payroll and benefits in-house or outsourcing them.
• Hiring employees in China under China representative office (China Ro)
  Employees cannot be hired directly through a representative office in China. The only way to ensure compliance is to hire employees through a China labor dispatch agency that provides China PEO or China EOR services.

3. Understanding what is a China PEO/China EOR employment agency in China.

PEO refers to a professional employment organization, in China it’s also called China employee outsourcing, labor dispatch service, you can find more introduction of China PEO/ China EOR and employment here. Foreign companies can hire staff in China through a China PEO/China EOR agency without setting up a legal entity in China.

Understand more about What is China PEO, and steps to engage a PEO in China.

4. Oral employment contact in China is not allowed.

Foreign investor must have a Chinese-registered company and sign a written China labor contract with each of your employees in China.

5. Employment contract term in China.

In most cases, an employer will sign a fixed-term contract with their employees in China. However, when the contract is renewed for the third time, it is converted into a permanent contract.

In China, it is more common to sign a two- or three-years employment contract.

6. Structure of the local labor contract in China.

In China, labor contracts must be written in Chinese and must include, but are not limited to, the following information:

• Company details, including full name, address, and legal representative or person in charge.
• Employee information such as full name, ID number, and address.
• Term of the employment contract (for example, 2 years, 3 years…).
• Position (job title), location (city), working hours, holidays, and leave are all factors to consider.
• Package includes a base salary, a bonus, and a health insurance policy.

7. Mandatory Benefits: Social insurance and housing fund in China.

When hiring employees in China, you should be aware that 5 social insurance and 1 housing fund are mandatory social security in China that all full time employees shall be enrolled when hiring in China.

5 Social Insurances in China:

• Pension:
• Medical Insurance
• Unemployment Insurance
• Work-Related Injury Insurance
• Maternity Insurance

1 Housing Fund

Both employee and employer shall contribute on the mandatory social insurance and housing fund on the monthly basis when hiring employees in China. The actual contribution percentage and base are determined by each city’s policy and will be adjusted annually.

Learn more about China social security system, read Complete Guide on China Social Security System.

8. Ways to contribute the social benefits (mandatory benefits) of my employees in China.

In China, you must first establish a company and then open a separate company social insurance and housing fund account so that you are able to hiring employees in China. After the company is established, After the company has been set up, you can contribute the social securities to the employees who have signed the labor contract with you. You can also outsource your employees’ payroll and benefits to a payroll vendor in China.

If you have no established company in China, you shall hire employees in China through China employer of record agency, and the China EOR agency will contribute employees’ China social security.

9. Popular job portals in China for searching the candidates.

The most popular job portals in China is: Zhaopin.com, Liepin.com, zhipin.com when hiring in China. However, these three job portals only accept a registered company in China.

If you don’t have a company in China, you can search candidates through Linkedin.com or engage a headhunting or recruitment firm in China to help you search the candidates and hiring employees in China.

Understand more on China portals in China, Top 5 Best Job Portals in China.

10. Employers are required to declare their employees’ individual income tax monthly.

In China, employees’ individual income tax (personal tax) shall be declared monthly by the employer, and yearly by employee themselves.

For the China individual income tax, it shall be withhold from their monthly gross salary and contributed to the tax bureau in China by employer.

11. Normal salary structure/offer package in China

• Gross salary: fixed base salary
• Flexible salary: performance bonus, commission, allowances
• 13 Month salary/ Annual bonus: common in China
• Mandatory benefits: 5 social insurances and 1 housing fund
• Supplementary health insurance: not mandatory, but very common among foreign employers
• Annual leaves Paid sick leaves

12. Structure of Payroll Cost of Hiring Employees in China

Your monthly employment cost consist of:

• +Employee monthly net salary
• +Employer contribution of mandatory benefits
• +Employee contribution of mandatory benefits
• +Allowances
• +Individual income tax
• +Other benefits offered.

Complete guide on How to Calculate Employee Salary in China? [China Payroll Guide].

13. China Annual leave Policies

Company cannot give the China annual leave days lower than the below policy:

• Employee who has one working year shall have at least 5 days as annual leaves per year.
• Employee who has more than 10 working years but less than 20 working years shall have at least 10 days as annual leaves per year.
• Employee who has more than 20 working years shall have at least 15 days as annual leaves per year.

During the annual leaves, employees are 100% full pay.

14. China Public Holidays

Below are the public holidays in China and is paid holidays you shall know when hiring employees in China. The exact date will be announced by the government at the end of December last year.

• New Year’s day: 1 day
• Spring Festival/Chinese New Year: 3 days
• Qing Ming Festival: 1 day
• Labor Day: 1 day
• Dragon Boat Festival: 1 day
• Mid-Autumn Festival: 1 day
• China National Holiday: 3 days

Employers shall pay overtime payment if they require employees to working during the public holidays.

15. China Probation Period

The probation period in China will be determined by the terms of the employment contract.

• Contract term is one year, probation period cannot exceed one month.
• Contract term is two years, probation period cannot exceed two months.
• For a three years employment contract, the probation maximum probation period can be six months.

Please kindly note that employees’ salary during probation period cannot be lower than 80% of the salary after the probation period when hiring in China.

16. Annual bonus is not mandatory in China

When hiring in China, employer shall know that annual bonus is not mandatory but common in China. Usually employer give the annual bonus before the Chinese new year when hiring employees in China, and annual bonus is normally decided base on company’s policy, company performance and each employees’ personal performance. Each employee can enjoy one time annual bonus tax beneficial policy.

17. How to hire foreign employees in China?

Foreign employees in China may begin working only after obtaining a valid work permit and a residence permit. If you want to hire expats to work for you, you must sponsor their work visa.

18. Understanding the severance payment in China to terminate employment relationship.

In China, severance pay is calculated based on the number of years an employee has worked for the company.

• One month’s salary shall be paid as severance payment for each full-year employee who worked for your company.
• For working periods of less than six months, a half-month salary will be paid.

If the employee’s monthly salary is greater than three times the local average monthly salary, the severance payment compensated shall be three times the local average monthly salary for each year.

19. Notice period in China for terminate the employment relationship

If an employee is on probation, both the employee and the employer must provide three days’ notice of termination.

Following the probationary period, both the employee and the employer must provide a 30-day notice period for termination.

If the employer needs to terminate the employee immediately, the employer must pay one month’s salary as compensation.

20. You don’t need to pay severance payment if employee resigned.

If your staffs resigned by themselves, employer don’t need to pay the severance payment for them.

21. China Employee background check & Criminal check.

It is common to do a reference check or background check of candidates’ personal information, educational background, previous working experiences when hiring in China. You can either have your internal HR staff do it or hire an experienced HR agency to do it and provide a report. If you engage a third party reference check agency in China to conduct the background check, such agency shall get the approval from employee to conduct the background check.

Employers in China are not allowed to conduct direct criminal background checks; however, if you do need, you can have your candidate apply for it.

22. Offer extra benefits to your employees in China.

Your employees’ sense of belonging and satisfaction is critical to their retention and motivation at work in China. The following are some of the most common benefits provided in China:

• Employees receive gifts and benefits on their birthdays, Chinese New Year, Dragon Boat Festival, Moon Cake Festival, and Women’s Day when hiring in China.
• It is also very common for foreign companies offering the commercial insurance, supplementary health insurance to your employees.
• Medical check.
• Team building

All of the above topics and questions are the most common things that an employer should be aware of and consider when planning to hire employees and start business in China. If you have any additional questions that have not been addressed here, please do not hesitate to contact us.

Read more about 6 Things to Consider when Doing Business in China.

About JSC – China PEO & Employment Expert.

JSC is a professional service company that assists foreign-invested companies in doing businesses in China.

Our core services China PEO and employment solution enables foreign investors to hire employees in China without setting up any company which allow them to expand into China market in days, not months. Our in-country local experts are also experienced in assisting businesses to compliantly establish their own legal entity in China.

Please contact us if you require any other information on China PEO.

Info@jscgroups.com

China, as one of the world’s fastest-growing economies, is luring more international entrepreneurs to invest and start business in China. Hire employees in China would be the first step in expanding into a new world. The following contents will assist you in understanding how to hire employees in China without forming a company, as well as provide you with valuable information for hiring and managing Chinese employees.

Contents:

• 4 Options of hiring employees in China.
• Hire employees in China without legal entity through China PEO/China EOR.
• Advantages of hiring employees in China through China PEO/ China EOR.
• Steps to start hiring employees in China with no registered company.
• Hiring Chinese employees after forming a company – China WFOE
• Hire employees in China under a Representative office- Ro
• Hiring staff in China through your local supplier or partner
• China Hiring Practices you need to know before hiring in China.

4 Options of hiring employees in China.

Before you hire employees in China, you must first learn about the various hiring options available in China and recruiting in China in order to ensure that your hiring and employment practices are legal in China.

1. Hire employees in China without legal entity through a China PEO/China EOR.

Using a China PEO or China EOR to hire employees in China is the quickest and most convenient way for foreign investors to start their business and build a remote team in China or recruiting in China. China employer of record, employee outsourcing, talent/labor dispatch are other terms used in China for PEO service, which means that a China employment agency (a China EOR/PEO company) can serve as the employer of employees who are selected and worked for foreign companies in China.
The employment agency (China EOR/PEO) like JSC will hire employees in China and sign the local employment contract with your employees in China, handling the monthly China payroll, mandatory benefits, China social benefits, expenses claim. China EOR and PEO agency will manage all of the necessary and mandatory operations that an employer must perform when hiring in China.
Due to the complexities of Chinese local laws, an experienced employment and China EOR/PEO agency will assist you in declaring all local taxes and benefits in accordance with the most recent policies in the cities where your employees are located.

Understand more on What is China PEO & China EOR? How does it work in China? Please click here.

Advantages of hire employees in China through China PEO/China EOR

Easy entry and exit into the China market

China EOR/PEO is the perfect solution for foreign investors who want to test the China market but hire employees in China but aren’t sure whether they want to make a long-term investment in China. You can easily hire employees in China or recruiting in China through the employment agency via China EOR/PEO within 2 weeks. If you are unhappy with the employee’s results or do not want to continue doing business in China, you may fire him or her through the China EOR/PEO and employment agency.

Focus on business

By hire employees in China through a China EOR or PEO in China, you avoid having to learn the intricacies of each city’s hiring and benefits policies, which are complicated, constantly evolving, and all in Chinese. You can outsource all of these administrative HR issues to an experienced China EOR/PEO & employment provider, who can assist you in hire employees in China and completing all of these necessary, mandatory operations effectively and efficiently, allowing you to concentrate on your own business.

Compliance

Doing business in China in a compliance way is one of the most important things for foreign companies. However, different cities in China has different polices regarding payroll, tax, benefits, and due to the language barriers, it is very difficult for foreign investors to know all these polices clearly and completely. Furthermore, since all of these policies are constantly evolving, it is important to stay up to date of the policies relating to hire employees in China.

Save time & Save money

Start doing business in China or recruiting in China or hire employees in China through China EOR/PEO can enable you to start the business within 2 weeks without setting a company in China. Setting up a company (WFOE) to start a business normally takes at least two months to complete, including the establishment of a bank account. You’ll also have to pay monthly tax accounting fees to keep the business running after it’s been founded.

Avoid language and culture barriers

One of the most important obstacles foreign businesses would encounter when doing business in China and hire employees in China is language and cultural differences. Selecting a qualified HR service provider in China will assist you in avoiding such stumbling blocks.

Steps to start hiring employees in China with no registered company.

1. Below are the different ways for you to find the right candidates in China.

Find through your own connections.

Post jobs in different job portals in China, e.g. Linkedin, zhaopin.com, liepin.com.

Leave the recruitment part to the China recruitment or China headhunting firm.

2. Sign local labor contract with employees

The HR agency in China you selected will hire employees in China and sign an official China labor contract with the candidates you selected.

3. Prepare the China Payroll Report

Your China EOR or HR agency will calculate the monthly employment cost based on the employee’s personal information, salary specifics, and social benefits contribution policies in each region, and submit a China payroll report to your company for payment in China.

4. Onboard Employee in China

The China EOR and HR agency will register the employee’s information into the government system including but not limited to the China tax system, China social security system which will enable them to complete all of the on-boarding procedures mandated by local regulations in China.

5.Pay Salary to Employee in China

The China EOR and HR agency will release the salary, allowances, expenses to employees on the monthly basis after receiving the payment from foreign companies.

2. Hiring Chinese employees after forming a company – China WFOE

For hiring staff in China, you need a local Chinese company to be the employer of your employees in China. If you have a long-term investment plan in China, or you are very confident of your China business, or you already have the signed client in China, setting a China WFOE is the best option for you before hiring employees in China or recruiting in China.

Before recruiting staffs in China, you must first create your own China WFOE, which takes about 2-6 months to complete China company formation process. Since different business practices in China necessitate different licenses, the entire process may take much longer. It is very important to find an experienced agency for you to set up a company in China.

After your China WFOE is completely operational, you must first set up your company’s social security and housing fund accounts, after which you will begin hiring employees in China and managing their monthly China payroll and China mandatory benefits.

3. Hire Employees in China under a China Representative office- (China Ro)

Many foreign investors prefer to setting up a representative office in China first. It is essential to understand that China representative offices are not permitted to hire employees in China directly. Hire employees in China through a licensed China dispatch/China EOR or PEO and employment agency is the only way to ensure compliance when hiring in China.

4. Hiring staff in China through your local China supplier or partner

Hiring employees in China through your China supplier or partner also can be an opportunity if you can locate a China local supplier or partner who is willing to hire employees in China for you. However, you must ensure that your China local supplier or partner is properly managing your employees’ payroll and employment in China; if they are not, your China employees’ experiences and feelings will be extremely negative, prompting them to leave the job. It is important for you to know what kind of contracts your China supplier signed with your employees in China.

China hiring practices you need to know before hiring in China.

1. China Hiring Practices: Employment contract term in China

In practice, employer in China shall sign a fixed term employment contract with their employees in China. However, when it goes to the third time renewal of the employment contract, then the contract becomes to a permanent contact.
Sign a two years or three years contract is more common in China.

No need to sign employment contract if you are hiring independent contractor in China.

2. China Hiring Practices: Mandatory benefits in China (China Social Security)

For hire employees in China or recruiting in China, you need to know the 5 China social insurance and 1 housing fund is mandatory benefits. Both employer and employee in China shall contribute the mandatory social security in China.
5 Social Insurances,
 Pension
 Medical Insurance
 Unemployment Insurance
 Work-Related Injury Insurance
 Maternity Insurance
1 Housing Fund

3. China Hiring Practices: Normal China payroll, salary structure/offer package in China

Below are the important components of China payroll for your understanding when hiring employees in China.

Gross salary: fixed base salary

Flexible salary: performance bonus, commission, allowances
13 Month salary/ Annual bonus: common in China but not mandatory
Mandatory benefits (China Social Security System): 5 social insurances and 1 housing fund
Supplementary health insurance: not mandatory, but very common among foreign employers
China Leaves: Public holidays, Annual leaves, Paid sick leaves

4. China Hiring Practices: Payroll Cost of Hiring Employees in China

For hiring employees in China, your monthly employment cost consist of:
+Employee monthly net salary
+Employer contribution of mandatory China social security contributions
+Employee contribution of mandatory China social security contributions
+Allowances
+Individual income tax
+Other benefits offered.

5. China Hiring Practices: Annual leaves in China

Employer shall aware all the full time employees in China shall enjoy the paid annual leaves when hiring in China. Company cannot give the China annual leave days lower than the below policy:
1 working years, at least 5 days annual leave.
10 working years, at least 10 days annual leave.
Employee working years>=20, annual leave >=15

6. China Hiring Practices: Public holidays employees can take in China

Employees in China shall enjoy the paid public holidays. Below are the public holidays in China and is paid holidays. The exact date will be announced by the government at the end of December last year.
New Year’s day: 1 day
Spring Festival/Chinese New Year: 3 days
Qing Ming Festival: 1 day
Labor Day: 1 day
Dragon Boat Festival: 1 day
Mid-Autumn Festival: 1 day
China National Holiday: 3 days
Employers shall pay overtime payment if they require employees to working during the public holidays.

7. China Hiring Practices: China Probation period for employees

Employer can set the probation period when hiring employees in China. The probation period shall be set based on the employment contract term.
If the employment contract is signed for 1 year, the probation period can be one month.

If the employment contract is 2 years, the probation period can be 2 months.

Employment contract term is 3 years or more, the probation can be a maximum of 6 months.

Please kindly note that employees’ salary during probation period cannot be lower than 80% of the salary after the probation period.

If you would like to understand your hiring cost in China, please read the below article: Hiring Cost in China 2024.