Hiring employees in China creates ongoing legal obligations — labor contracts, social insurance compliance, termination procedures, and foreign employee work permits all carry specific requirements that change frequently. We review your employment practices and flag risks before they become disputes or penalties.
China’s Labor Contract Law strongly favors employees. A missing contract, an incorrect termination, or an underpaid social insurance base can expose your company to significant back payments, penalties, and labor dispute liability. We identify these gaps before they surface.
This page covers the compliance review side: we assess your existing labor contracts, social insurance position, and foreign employee work permit status, and flag what needs to change. The ongoing execution — drafting contracts, filing monthly social insurance and payroll, and handling work permit applications and renewals — is delivered through our HR platform, ExpertinChina.com, which also publishes a detailed Hire in China guide if you’re still working out how to structure your hiring.
Chinese labor law requires written contracts for all employees from day one of employment. The penalties for non-compliance — including double-salary awards for uncontracted periods — are well-established and frequently enforced. We review your existing contracts and templates to identify and close any gaps.
Labor contract compliance review report identifying specific risk items. Prioritised remediation recommendations. Revised contract clauses or template suggestions where gaps are found.
Need contracts drafted, updated, or managed on an ongoing basis? ExpertinChina.com handles contract drafting and HR administration directly — see their China Labor Law Guide for the full framework.
Visit ExpertinChina.com →Foreign nationals working in China require a valid Work Permit (外国人工作许可证) and Residence Permit (居留许可) — both tied to the employing entity and subject to annual renewal. We monitor compliance status across your foreign employee population and handle the documentation that compliance checks and renewals require. ExpertinChina.com’s China Work Visa Guide covers the application process end to end.
Complete foreign employee permit compliance audit. Expiry calendar with renewal timeline. Tax certificates prepared for renewal submissions. Work permit cancellation handled promptly on departure — protecting the company from liability for lapsed permits. For first-time applicants, one step is easy to underestimate: the health check certificate. ExpertinChina.com’s guide to obtaining a health check certificate walks through where to go and what to expect.
Work permit cancellation on departure: When a foreign employee leaves the company, their work permit must be formally cancelled. Failure to cancel creates a compliance record against the employing entity that can affect future permit applications. We handle this as part of our offboarding compliance service.
Need work permit applications, renewals, payroll, or full HR outsourcing? These services are delivered through our specialist HR platform ExpertinChina.com — a licensed HR service provider under Gomax Group.
Visit ExpertinChina.com →Probation period length is capped by the duration of the labor contract: up to 1 month for contracts of 3 months to 1 year; up to 2 months for contracts of 1 to 3 years; and up to 6 months for contracts of 3 years or more, or for open-ended contracts. A probation period can only be agreed once per employee — you cannot reset the clock with a new contract for the same role. Exceeding these limits or setting a second probation exposes the company to compensation claims.
An employee is entitled to request an open-ended (无固定期限) contract in two circumstances: after completing 10 consecutive years of service with the same employer, or when the company proposes a third consecutive fixed-term renewal. Refusing to offer an open-ended contract in either situation is treated as a failure to sign a written contract, which carries a double-salary penalty. We flag employees approaching these thresholds during our compliance review.
Generally yes — foreign nationals employed in China and holding a work permit are subject to Chinese social insurance obligations unless their home country has a bilateral social security agreement with China that provides an exemption. Countries with active agreements include Germany, South Korea, Japan, Finland, Denmark, Canada, and several others. We assess exemption eligibility based on the employee’s nationality and circumstances as part of our social insurance review.
Economic compensation (经济补偿金) is calculated at one month’s average salary per year of service — capped at three times the local average monthly salary per year, with total years capped at 12 for the purpose of the cap calculation. For unlawful terminations, the amount doubles. The calculation must use the employee’s average salary over the 12 months prior to termination. Getting this wrong — in either direction — creates dispute risk. We calculate and verify severance amounts as part of our contract compliance service.
No — our role here is the compliance review: assessing your labor contracts, social insurance position, and work permit status, and flagging what needs to change. Ongoing execution — monthly payroll processing, social insurance and housing fund filing, contract drafting, and work permit applications and renewals — is handled by our HR platform, ExpertinChina.com, which specializes in this on a day-to-day basis.
We identify contract gaps, social insurance risks, and work permit issues before they become disputes or penalties.
Social Insurance Compliance Review
Social insurance contributions — the mandatory five insurances and housing fund (五险一金) — are required for all locally-contracted employees. Contribution bases, rates, and foreign employee exemption rules vary by city and nationality. Underpayment, even unintentional, creates back-payment liability. See ExpertinChina.com’s China Social Insurance Guide for the full breakdown by city and employee type.
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Social insurance compliance report. Estimated back-payment exposure where underpayment is identified. Clear recommendations for bringing contributions into compliance going forward.
Contribution base compliance: Social insurance contributions must be based on actual salary — artificially lowering the contribution base is a common compliance gap. With Golden Tax Phase IV linking payroll, tax, and social insurance data across systems, underpayment is increasingly visible to authorities. We identify this risk as part of our review.
Need monthly social insurance filing or payroll processed for you? ExpertinChina.com manages this on an ongoing basis — see their China Payroll Guide for how it works.
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