Page 50 - Doing Business in China

MANPOWER

IMPLEMENTING THE EMPLOYMENT CONTRACT
Employment contracts are categorised into fixed-term employment contracts, open-ended employment
contracts and employment contracts that expire upon completion of a stipulated job�

According to the Labour Contract Law of the People’s Republic of China, a written labour contract shall be created
for the establishment of a labour relationship� Where a written labour contract is not created simultaneously with
the establishment of a labour relationship, a written labour contract shall be created within one month from the
date of commencement of work� If an employer fails to conclude a written employment contract with an employee
within one year from the employee’s first day of work, the employer and employee shall be deemed to have agreed
to an open-ended employment contract�

If the contract is bilingual, the original version in Chinese shall prevail� The signature on the contract should be in
Chinese�

TYPES OF EMPLOYMENT CONTRACTS
Fixed-term
An employment contract with a predetermined ending date as agreed upon by both the employer and employee�

Open-ended
An employment contract with no predetermined ending date as agreed upon by both the employer and employee�

Specific Work
An employment contract that expires upon the completion of a specific task as opposed to a specific length of
time�

PROBATIONARY PERIODS

Contract Length Probation Period
Contract term < 3 months No probation
3 months ≤ Contract term < 1 year Probation ≤ 1 month
1 year ≤ Contract term < 3 years Probation ≤ 2 months
3 years ≤ Contract term ≤ Open-ended Probation ≤ 6 months

▪ An employer may stipulate only one probation period for any given employee�

▪ No probation period may be specified in an employment contract with a term that expires upon completion of
a certain job or an employment contract with a term of less than three months�

▪ According to the law, the wages of an employee on probation may not be less than the statutory minimum
wage required of the place where the employer is located and less than 80% of the wage upon confirmation
that is agreed upon in the employment contract�

Doing Business in China 2023 | 49