Employer Of Record China
Infotree Global provides employer of record solutions to companies who want to set up payroll and hire employees in China without setting a subsidiary or branch office. Backed up with our in-house recruitment team, we carry out tasks like sourcing, hiring, and onboarding your employees in China. Staff hired by us are in accordance with the employee regulations in China. With us, you have full control over your employees.
Table of Contents
• Hiring in China
• Employment & Labor Laws In China
• Employment Contracts in China
• China Compensation and Benefits
• Payroll Tax in China
• Challenges When Expanding Into China
• Benefits of Employer of Record China
• Why Infotree Global Solutions?
Hiring in China
While you are going to start a business in China, there are few considerations to pay attention to before hiring employees. It is important to put everything in writing to avoid confusion and tussle between both parties. Further, it is also a legal mandate to offer your employees a written employment contract in the first month of their joining. If you are unable to do so then the employee is eligible to get twice their salary.
Understanding Chinese culture is important if you wish to take your business there and our China employer of record can help. The ‘Face’ indicates respect and reputation of its nationals and hence, if you have anything to discuss with your staff, do it privately. Else, it would be considered as insulting an individual in front of colleagues. Standard Bonus here is known as the “13th-month salary”. It is a common practice in China and employees should have clarity of the same in their initial contract phase.
Mandarin is the national language in China there are different languages used in various locations. Cantonese is the prime language in the southwest part of China and the major centers are Shenzhen, Hong Kong, and Guangzhou lying in the Guangdong Province. Similarly, few areas like Beijing, Shanghai, Tianjin, and Chongqing have slightly different languages.
Employment & Labor Laws in China
Talking about employment law in China indicates all the associated factors. This may involve issues on remuneration, employment contracts, workplace safety, working hours, and labor disputes. Besides, it also includes training, protection from discrimination, social insurance, wage regulations, and other legal responsibilities the employer should legally abide by.
China employment law has the following obligations that include a strict termination system, the existence of local rules and policies, and varying court interpretations of the same legal troubles.
The two China employment laws must for all international investors before starting a business includes:
• 1995 Labor Law of the People’s Republic of China
• 2008 Labor Contract Law
The China employment laws are way too complex and intimidating for investors having the potential legal risks. Therefore, taking the assistance of a professional employer of record China can help in great ways.
Employment Contracts in China
If you plan to establish a subsidiary in China, there are few factors to consider. Most important are the Business factors that make you aware of the employment contracts that should meet the local standards besides having professionally drafted. It should mention the industry and business type, nationality, and presence of trade agreements or business relationships. Different cities and regions may vary when it comes to rules, availability, and costs. That is why advice from China employer of record is always recommended. Some information that must be maintained in the contract is provided below:
• Working hours
Most of the rules in China are designated by the Labor Law, thus, there can be some changes in the criteria by employers if the proposal is agreed by the labor union or proper labor administration authority and employees too. The requirement of changes usually occurs while setting working hours for special positions including field personnel, hiring managerial staff, security personnel, or the sales staff.
Generally, the working schedule in China is centered on a 40-hour standard week running from Monday to Friday but no more than 44 hours a week. The office operational hours are considered from 8 am to 6 pm with two hours lunch break. but, for government offices, it is from 9 a.m. to 5 p.m. Offices remain closed on weekends; Some employers allow holidays for only one day each week while others provide two holidays.
Bonus offers and their amount vary from job position and the company respectively. Most Chinese employees usually receive a year-end bonus. Apart from the annual compensation details, there is a market norm in China of providing one additional month’s salary to all while a sales employee may get the offer of commission structure. Nevertheless, such a bonus is not mandatory anywhere in the country. It is only the bonus given by the employers at will during Chinese New Year.
• Probationary Period
A probationary period is a fixed time at the starting of the employment, during which the worker is not entitled to all the contractual benefits but only some. Chinese law prohibits any probationary period for part-time, temporary, or freelance employees.
The employee on probation can be exempt from the work even without the notice period. The setup must comply with both parties. Moreover, one employee must not have more than 1 probationary period even if the employer renews the contract.
The probation period generally depends upon the length of the employment contract. If the latter is of 3 months to 1 year, the former takes place for one month. If the contract is agreed to be of 1 year to 3 years, the probationary period can be a maximum of 2 months. In case of no fixed term, it can be a maximum of 6 months. Most of the employees are entitled to 3 months probation period.
China Compensation and Benefits
When it comes to China’s compensation laws, it offers great advantages to employees. However, it is important to comprehend every aspect of the compensation law to offer your staff a fair remuneration with extra benefits to stand out. The management of employment contracts demands the professional consider several negotiating terms while setting up employees’ statutory benefits. They all should be complying with locally updated government rules and regulations as below are:
The minimum salary in China may vary depending on the location and area. For instance, you may find diversity in wages offered by places like Shanghai, Shenzhen, and Guizhou. Business owners are given the flexibility to offer wages in cash or bank transaction. Due to market norms, an extra bonus can be given. However, the employer can specify the monthly remuneration, terms of payment, and total annual pay in the initial contract. Bonus is not essential but can be considered under suitable criteria.
• Maternity leave
According to the Labour Law of the People’s Republic of China, the female staff is entitled to 90 days of maternity leave after the delivery day. However, at the age of 24, If the woman gives birth to a child, she gets an additional late maternity leave. Only employees and regional regulations can determine additional days before or after birth if the requirement arises. Also, if there is the case of giving multiple births, the female employee is granted an additional 15 days leave for each additional child.
Another important point to consider is that employers cannot ask for overtime or night shifts from females with more than seventh months of pregnancy. Besides, they must not be terminated too during this period. During maternity leave, employees receive maternity allowance. It is the legal rule to provide full pay to them. The employers can perform the activity either through the Social Security Bureau or by themselves.
Vacation offering is for the employees who have continuously worked for more than 1 year and those with less than that receive no vacation days. Employees get paid leave depending on how many years they have worked. Those with working experience between one year and ten years get 5 days of annual leave. Those with 10-20 years of experience get 10 days of paid leave. Those with 20 years or above are entitled to 15 days annual leave. Apart from these local regulations, foreign employers may provide 14-28 days of vacation to those holding good positions in an organization.
If someone does not use the vacation offering, they can carry the leave forward to the next year. Still, if the days are not carried forward due to the employee’s will or employer’s requirement, the employee gets double daily wages, in addition to regular salary, for making the vacation working days.
• Sick Leave
If the employee has suffered a serious injury during the working period, he/she is entitled to sick leave of 3 months to 1 year with the compensation amount of at least 80% of the minimum salary. Sick leave must be given to both foreign and local Chinese. The amount of this compensation depends upon factors like working experience, local regulations, and the determining salary.
• Health benefits
Employees are entitled to basic health and pension insurance through the national system in China. As the coverage is publicly funded, in cities, employees have to enroll in Urban Employee Basic Medical Insurance financed by employer payroll taxes and employees. Employees contribute 2% of the salary and employers do between 8%-10% of payroll. However, the insurance is funded by central and local governments if the case is of Urban-Rural Resident Basic Medical Insurance, which is ensured in rural areas.
If you offer employees private insurance to cover costs and services, that are generally not offered in public insurance plans, it becomes easy to fill in coverage gaps.
• Worker’s compensation
Apart from minimum wage and the supplementary but optional bonus of 13th-month salary, employees get compensation in terms of seven paid national holidays, sick leave, maternity leave, and annual vacation. The amount of compensation is determined by labor laws and local regulations, but it is mostly paid by employer social costs.
Thus, handling all nuances of workers’ compensation requires analytical and consistent attention for which we act as an outsourcing option of China Employer of Record for you. When you hire Infotree Global as your employer of record China to manage your employees overseas, you need not worry about complex legal compliance. With our in-country experts and professional knowledge, you can have all the details of employee entitlements in China and draft your employee contract accordingly. Contact us today and let us take the responsibilities off your shoulders.
Payroll & Tax in China
When it comes to calculating payroll and taxation, China has specific rules. However, it depends on the hiring factors whether the company employs international citizens or local employees. The main concern for an international company is that it needs to be in compliance with tax laws in China.
China has few unique rules associated with employment, for instance, foreign citizens must pay local Taxes and Health Insurance besides having their own Health Insurance. In addition to the employers of Chinese people must register and contribute, varying by region to the social insurance system of China. It is known as the five insurances comprising of medical insurance, pension fund, unemployment insurance, industry injury, and maternity insurance. In China Individual income tax (“IIT”) – progressive rates range from 3% to 45%, Corporate tax in China is 25%, Sales Tax is 17%, whereas withholding tax is 10% for non-resident companies. By partnering with our China PEO & Employer of Record, Infotree Global team of in-country experts will take care of all your payroll and taxes.
Challenges When Expanding into China
Before you start establishing your business in China, you need to be familiar with Chinese employment law. It may appear complex and daunting when looking from a different country. Though in some ways, these are similar to the employment laws of other countries. Other factors that make it more complicated include the variation of laws between regions and a conflicting approach to law adherence in various cities. For instance, there is a discrepancy between minimum wages and welfare contributions in many cities. In such a scenario, professional services of employer of record China are highly sought after while employing in China to guide you in the broadest sense.
Benefits of Employer of Record China
To simplify your expansion process let Infotree Global assist you to deal with all the complexities. Be it hiring employees or distributing payroll or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worries.
• Market Access
Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using EOR services, an international organization can avail the expertise of a Chinese employee to work for its company. Besides quick access to the Chinese market, the EOR also enables the client to ease off worries related to payroll and HR.
• In Country Laws
It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in China, you need to be well aware of the payroll and taxation rules. With China Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expanse management, withholding charges, or business tax, an EOR company takes care of it all with total compliance.
• Diverse Solutions
No matter whether you already have a company on international location or you are going to establish the one, an employer of record can help you significantly. The EOR Company can hire staff on your behalf without having the need of setting up a branch in China. If your firm is already operating, using EOR for managing payroll tasks can be a great idea as they can present an effective solution to tax and accounting responsibilities in the country.
Why Infotree Global Solutions?
Infotree Global is dedicated to providing professional assistance to help you set up business in China. We provide the support of our in-country team of professionals to undertake all the legal formalities associated with employment in China and help you stay compliant with country labor laws. Owing to our rich industry experience, we help you hire the most talented individuals for your company and embrace all the payroll-related jobs. Thus, we help you save time without worrying about legal hassles so that you can stay focused on your expansion endeavors. With our global payroll and employer of record solutions, you can experience professional assistance at every step and expand your business without worrying about legal complexities.
Make the most of our professional services and overcome the challenges associated with international hiring. If you want to hire our China Employer of Record and need assistance, connect with us!