How to create offer letters for employees in China
So you’ve decided to expand hiring into the People’s Republic of China (PRC) and have selected the best candidate as your potential employee. Now, it’s time to send that applicant a job offer letter.
Crafting a compelling and legally compliant offer letter is a crucial step in the employee recruitment process. If composed correctly, it can help initiate an employment relationship by drawing in talent, ensuring a smooth hiring process, and even protecting you should a legal dispute arise. However, the offer letter needs to take into account both your company policies as well as Chinese employment laws, which can be tricky.
Read on to learn more about drafting effective, compliant offer letters to hire full-time employees in China.
China job offer letter checklist
Note: A job offer letter is not a substitute for a written employment contract, which is mandatory per Chinese law. For foreign companies hiring Chinese employees, all contracts should be supplied in English (or your local language) as well as Standard Chinese.
- Position (job title), job description, start date, and probationary period.
Include the official job title and description of the employee’s duties, as well as the start date for their new job. Mention what job type this is—non-fixed term or indefinite contracts are the most common type of contract in China for full-time employees. Outline if there is a trial period to ensure that the employee is suitable for the role. In China, the maximum probationary period for a non-fixed term contract is six months for non-managerial positions and 12 months for managerial positions. Note that, even during probation periods, your employees cannot be terminated at will due to China’s strict worker protection laws—there must be a reason for the termination and they must get sufficient notice. - Definition of workplace. Specify whether the Chinese employee is expected to commute to an on site location or if they’ll be able to perform their duties remotely.
- Compensation & Benefits.
- Salary. In addition to the amount of the employee’s annual salary in people's renminbi (RMB), indicate when they’ll be paid their monthly salary. Typically, workers in China receive monthly paychecks several days to several weeks into the month for the previous month of work.
- Other remuneration, if applicable. Chinese employees can be offered equity incentive plans. However, note that Chinese employees are only allowed to hold shares of overseas parent companies if that company is public.
- Benefits. Specific details about the employee benefits won’t be expected until you draw up an employment contract, but it’s helpful to include some general information about company benefits in the initial job offer letter. The following are statutory benefits for full-time employees in China:
- Social security contributions, which include pension, unemployment insurance, medical insurance, and work-related injury insurance
- Housing fund contributions
- Maternity and paternity leave. Female employees should get 98 days of paid maternity leave, whereas paternity leave typically does not exceed 14 days. Some Chinese cities mandate that women aged 24+ should get approximately 30 days of additional leave after giving birth for “late maternity leave” due to their age.
- Paid time off/vacation, which ranges between 0 and 15 days depending on the length of the employee’s service. For those under one year of employment, there’s no requirement to supply paid time off but giving first-year employees time off can make you a more competitive employer.
- Public holidays off. In China, there are seven public holidays, which include New Year’s Day, the Spring Festival (Chinese New Year), the Qingming Festival, Labor Day, the Dragon Boat Festival, the Mid-Autumn Festival, and National Day.
- Working hours. State the new hire’s expected working hours and the company’s overtime policies. China is on a typical five-day work week. Employees shouldn’t work for more than 8 hours per day or 44 hours per week. China has overtime limits of 36 hours per month unless an emergency warrants temporarily longer working hours. For regular workdays, the minimum overtime payment is 150% of the standard hourly rate. Overtime for rest days should be paid out at 200% and 300% for statutory holidays.
- Sick leave. Include your company’s sick leave policy and the process for notifying managers in the event of an illness. In China, employees aren’t owed sick leave for their first year but, after that, are on a sliding scale of three to 24 months of paid leave for medical ailments and treatment depending on their tenure. Sick pay shouldn’t be lower than 80% of the minimum wage. (Note that minimum wage varies depending on the region’s level of economic development.) Worker’s compensation entitles employees to a year of leave at full pay while they receive treatment.
- Termination policy. Include information on your company’s termination policies. List the reasons employees can be dismissed and how much notice they should expect to receive. Employees cannot be terminated at will in China. The required notice period can range depending on the industry. Typically, employees who have worked between one month and two years should get at least a week of notice period. Those who have worked for the company for more than two years should get one week of notice per year of service, maxing out at three months of notice. In China, employers can also pay employees in lieu of notice. Employees can be dismissed unilaterally with 30 days of notice or a month of salary if they can no longer work after being injured or falling ill, if they are unable to perform their role even after training, or if circumstances have changed so that the labor contract can no longer be fulfilled. Employers typically need to make severance payments if they initiate the termination. If the employee quits, they may still be owed severance if the employer hasn’t provided proper labor conditions, paid the employee on time and in full, paid for social security contributions, or is otherwise in violation of labor laws.
- Contact information and phone number
- Non-disclosure/non-use/non-circumvention agreements (NNN). Typical NDAs are not enforceable in China. However, NNNs can be used in China to protect trade secrets, proprietary information, and confidential information. NNNs enforce that information cannot be shared with anyone or used in any way, and protect employers from “behind the back” tactics. Include any NNN provisions in the job offer letter.
- Note that the job offer is contingent on their ability to legally work in China. If the potential employee is not a Chinese citizen, they will need a work visa to work legally in China. The most common work visa is a Z visa. If you are hiring an employee already working under a Z visa for another employer, that worker must reapply for their visa. If they’re in the same occupation but switching to another employer, they can stay in China during the application process and may not need a new Z visa as long as their resident permit is valid during the transfer. However, if the worker is changing occupations as well as employers, they’ll need to exit the country, apply for a new visa, and then reenter.
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Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
last edited: March 26, 2024
