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Employment Agreement Requirements in China Internal

Gretchen Brooker
  • Updated

Can employment agreements be backdated in China? 

No, employment agreements cannot be backdated in China. 

 

Can a supported employee work before their start date?

No, supported employees in China cannot work before their start date.

 

Can we pay the salary in a different currency than the local currency?

No, salaries in China must be paid in Chinese yuan (renminbi).


Should we classify our talent as a contractor or an employee?

In simple terms, classification status comes down to whether the individual is in business for themselves or under your company's control. Whether the individual is an independent contractor or an employee can sometimes be complicated and will come down to the circumstances of each working arrangement. 

Specifically, courts look at the following factors to determine whether an individual is an employee or a contractor: 

  • Whether or not the individual exclusively provided services to the company
  • The degree of control the company had over the individual’s work (including where, when, and how to perform the work under the employment agreement)
  • Whether the individual was required to supply their own tools and equipment
  • Whether the individual hires their own helpers to complete necessary duties
  • The degree of business risk taken by the individual (e.g., their chances for profit and risk of loss)
  • The degree of integration between the individual’s activities and the company’s business

It is highly uncommon for contractors to be used in China, and such a relationship is often considered de facto employment. Chinese labor laws favor direct employment that requires contributions to the country's social insurance program. Because of this, it can be exceptionally difficult to use contractors legally.

There is no concept of "contractor" under Chinese labor laws. However, under civil laws, an individual may enter into a “contract of services” with a company. Although they are not called “contractors,” that is in effect what individuals who enter into a “contract of services” are.

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