Employees who work on official holiday could have triple salary, and the employer could not replace the triple salary with complementary rests.

2. Double Cease

Employees who work on double cease could have complementary rests. If the employees refuse to have complementary rests, the employer has to pay double salary.

3. Annual Leave

The chinese employer may offer longer annual leave to foreign employee, due to the foreigners are accustomed to the holiday system of their own country. It is lawful when employee benefits package is  better than compulsive law standard. Thus, extra annual leave is legal.

Usually, the employees could have triple salary than normal working day when they didn’t take the annual leave.

However, could they also have triple salary for working during the extra annual leave?

For example, the labor law said employee  A could have 5 days annual leave, but the employer offer 7 days, could the employee A asks triple salary for extra 2 days? The law is not certain about it. It’s better stipulate the compensation rules in labor contract for extra annual leave.

4.Normal Working Day

Employees who work extra time on working days could have complementary rests. If the employees refuse to have complementary rests, the employer has to pay 150% salary.

1. Defination of Social Insurance System

It is a social security system built by compulsive law to protect labourer when they are getting old, sick, unemployed, etc.

2. Types of Social insurance

Five types:  employment injury insurance, basic endowment  insurance, medical  insurance, unemployed insurance and maternity insurance.

3. Types of Workers

In Shanghai, with ”hu kou”（户口), the policy divides workers into  local workers and migrant worker, and migrant worker could subdivide into City&Town migrant worker and rural migrant worker.

All kinds of  workers has at least three kinds of social insurance-employment injury insurance,  endowment insurance and medical insurance. Local worker and City & town migrant workers (16-45 years old ) may have other 2 kinds of social insurances that mentioned above.

4.The difference of different types of workers when paying social insurance

The Caculation of “Social insurance” could  be applied to the fomula:Payment base* percentage (provided by local government)

(1)Comprehensive Insurance

It’s a type of social insurance for migrant workers, especially for rural migrant workers. The employer shall pay all of it.

Payment base of Comprehensive Insurance=Shanghai employees’ average monthly income of last year * 60%=3896RMB(average monthly salary of year 2010)*60%=2338RMB

Percentage=12.5%

Thus, the comprehensive insurance =2338RMB*12.5%=293RMB

(2) City Social Insurance

Except for rural migrant workers, other kinds of worker may be covered by City social insurance or town social insurance. If the company is registered at a town of Shanghai, then the workers of it could only have town social insurance; and if the company is registered at downtown, then the workers shall have city social insurance.

The way of caculation:

First of all, payment base of city social insurance shall be limited to a range of :

Shanghai employees’ average monthly income of last year * 60%  ~Shanghai employees’  average monthly income of last year* 300%

( It is from 2338 RMB to 11688RMB between  April 1st 2011 and March 31st 2012  )

Secondly, Payment base shall also be equal to your actual average monthly income of last year

Thirdly, following are the percentage employer and employee shall pay for city social insurance.

(3)Town Social Insurance

Payment base=Shanghai employees’ average monthly income of last year * 60%=2338RMB

Percentage=25%( Employer 25%, Employee o%)

Risk 1: Vague Recruitment Requirements on Recruitment Advertisement

          Recruitment Requirements are something the employer could count on when it wants to fire an employee during probation period. Thus, the employer needs:

          1) to detail the common requirements on recruitment ad, such as good health, honest, education, working experience, working time, etc.

          2) to detail the specific requirements of the position, such as certain certificate or certain working experience.

         3) let the interviewee sign the “recruitment requirement” and keep it.

Risk 2: Providing Fake Information

        Providing fake information is a dangerous thing to do, no matter for employer or employee, which may lead to invalidation of the labour contract and compensation. Thus, as an employer, you shall:

       1) print the resume and make sure the interviewee sign on it;

       2) prepare a registration form to let the interviewee fill it in. The form may include the basic personal information and  the information you want to know from the interviewee, but it is not showed on resume.

       3) tell the truth of your company, for example, don’t exaggerate the scale of your company;

Risk 3: Discrimination

        No discrimination about age, gender, nation, deformity, non infectious virus carrirer…

       Even you have discrimination about something, don’t show it on your recruitment ad or your interview, otherwise, you might be sued for it.

Risk 4:  Didn’t Do Health Test

          If you hire someone with some disease, you may have to pay the sick leave wage  for their treatment period.

         However, pregany or non infectious virus carrier shall not be considered as not healthy.

Risk 5: Forget to Promulgate Employee handbook

        How to prove you have promulgated your employee handbook? Prepare a signature page at the end of employee handbook and let the employee sign on it.

What’s the purpose of letting the interviewee or employee sign on the documents mentioned above?

Saving the evidence, you shall know the employer is liable for providing evidences  in China when labour disputes arising.

            No,  the relation between the family and its Ayi is not a labour relation.

• How to define the relation between a family and an Ayi ?

            It’s a service relation.

• What’s the difference between the service relation and labour relation?

           Service relation is between equal parties, civil rules in China protect both parties without prejudice.

          Labour relation is between unequal parties. When drafting the labour rules, the legislator assumed the employer has power over employee, so the employee needs more protection from law.

• How does a family fire an Ayi?

        Under civil law, you could fire an Ayi any time if you want to and don’t have to pay compensation for it.

•  Should a family pay public holiday for an Ayi?

         You’d better let her off on these holidays, cause public holidays are for all the citizens in China. But there is no need to pay salary on these days, keep in mind, it’s not  labour relation, you’re equal, so no service, no salary.

The difference  between Chinese labourer and Foreign labourer when concluding a labour relation in China is the foreign labourer has more promissory areas. Due to statutory rules are used to protect labourer, the Chinese labourer is protected more.

*When I talked about statutory areas,  I don’t mean the entire area is statutory, it’s just there are certain rules in this area shall be complied with. For example,  about the working time, the law just draws up the maximum working hour per day and per week, any agreement lower than this maximum limitation is allowed.

PART ONE　GENERAL PROVISIONS

　　Article 1　These Regulations are formulated in accordance with the provisions of relevant laws and regulations in order to strengthen administration of the employment of foreigners in China.

　　Article 2　For the purposes of these Regulations， the term “foreigners” shall refer to persons who do not have Chinese citizenship pursuant to the provisions of the PRC， Nationality Law.

　　For the purposes of these Regulations， the term “employment of foreigners in China” shall mean the acts of lawful engagement in social labour and obtaining of labour remuneration inside the People’s Republic of China by foreigners who do not have the right of permanent residence.

　　Article 3　These Regulations apply to foreigners employed inside the People’s Republic of China and work units inside the People’s Republic of China which employ foreigners.

　　These Regulations do not apply to personnel of embassies and consulates of foreign countries in the People’s Republic of China， the representative offices of the United Nations in the People’s Republic of China and other international organizations who enjoy diplomatic privileges and diplomatic immunity.

　　Article 4　The labour administration authorities of the People’s Governments of each province， autonomous region and municipality directly under the central government and the labour administration authorities at the regional and municipal level authorized by them shall be responsible for administration of the employment of foreigners in China.

　　PART TWO　EMPLOYMENT PERMITS

　　Article 5　To hire a foreigner， the employing unit must apply for an employment permit for such foreigner， and may hire such foreigner only after obtaining approval and a Foreigner’s Employment Permit of the People’s Republic of China （hereafter “Permit”）。

　　Article 6　The position for which a foreigner is hired by the employing unit shall be a position for which there are special requirements， for which there is a temporary shortage of suitable candidates inside China and which does not violate relevant state regulations.

　　An employing unit may not hire a foreigner to engage in artistic performances of a commercial nature， except， however， in the case of persons who conform to the provisions of section （3） of Article 9 hereof.

　　Article 7　In order to obtain employment in China， a foreigner must satisfy the following conditions：

　　1. be 18 years of age or above and in good health；

　　2. have the expertise and relevant work experience required for their work；

　　3. have no criminal record；

　　4. have a confirmed hiring unit； and

　　5. have a valid passport or other international travel documents which can be used instead of a passport （hereafter “Passport Substitute Documents”）。

　　Article 8　A foreigner employed in China shall enter the People’s Republic of China on a work visa （in the case of reciprocal visa exemption agreements， matters shall be handled in accordance with such agreements）， and， after entering the People’s Republic of China， may be employed inside the People’s Republic of China only after obtaining a Foreigner’s Employment Certificate （hereafter “Employment Certificate”） and foreigner’s residence documents.

　　Foreigners who have not obtained residence documents （that is， holders of F， L， C and G visas）， foreigners who have come to study or to conduct fieldwork and the accompanying dependants of foreigners holding work visas may not be employed in China. In extraordinary circumstances， the employing unit shall apply for a Permit in accordance with the examination and approval procedures specified herein， and the foreigner so hired shall proceed to the public security authority to change his or her status on the strength of such Permit. Such foreigner may be employed only after obtaining an Employment Certificate and a residence permit.

　　The employment of spouses of personnel of the embassies and consulates of foreign countries in the People’s Republic of China and the representative offices in the People’s Republic of China of the United Nations Organization and other international organizations shall be handled in accordance with the PRC Ministry of Foreign Affairs， Concerning the Employment in China of the Spouses of Personnel of Embassies and Consulates of Foreign Countries in the People’s Republic of China and the Representative Offices in the People’s Republic of China of the United Nations Organization Regulations. The relevant procedures shall be carried out in accordance with the examination and approval procedures specified in paragraph 2 of this Article.

　　Permits and Employment Certificates shall be centrally printed by the Ministry of Labour.

　　Article 9　Foreigners who conform to any of the following conditions need not obtain a work permit or Employment Certificate：

　　1. foreign specialist technical or management personnel hired and paid for directly by the Chinese government， or foreign specialist technical or management personnel who hold a high-level technical title or credentials in respect of special skills confirmed by an authoritative technical or administrative authority or professional association of their own country or an authoritative international technical or administrative authority or professional association and who are hired and paid for by a state authority or institution， and foreigners who hold a Foreign Expert Certificate issued by the Bureau of Foreign Experts；

　　2. foreign labour service personnel with special skills who hold a Work Certificate for a Foreigner Engaged in Off-Shore Petroleum Business in the People’s Republic of China， who are engaged in off-shore petroleum business and do not need to go ashore； and

　　3. foreigners who hold a Temporary Permit to Engage in Commercial Performances approved by the Ministry of Culture to carry out artistic performances of a commercial nature.

　　Article 10　Foreigners who conform to any of the following conditions need not obtain a Permit， and may， after entering the People’s Republic of China， directly obtain an Employment Certificate on the strength of the work visa and relevant certification：

　　1. foreigners hired to come to China to work on Chinese-foreign co-operative exchange projects pursuant to agreements or treaties between China and the government of a foreign country or an international organization； and

　　2. the chief representative and the representatives of the resident representative offices in China of foreign enterprises.

　　PART THREE　APPLICATION， EXAMINATION AND APPROVAL

　　Article 11　To hire a foreigner， the employing unit must complete an Application Form for the Employment of a Foreigner （hereafter “Application Form”）， submit an application to its authority in charge of the industry at the same level as the labour administration authority in charge （hereafter “Authority in Charge of the Industry”） and provide the following valid documents：

　　1. evidence of the education and work experience of the proposed foreign employee；

　　2. a letter of intent to hire；

　　3. a report on the reason for proposing to hire a foreigner；

　　4. evidence of the qualifications of the proposed foreign employee to engage in such work；

　　5. evidence of the state of health of the proposed foreign employee； and

　　6. other documents specified in laws and regulations.

　　The Authority in Charge of the Industry shall carry out examination and approval in accordance with Article 6 and Article 7 hereof and the provisions of relevant laws and regulations.

　　Article 12　After approval by the Authority in Charge of the Industry， an employing unit shall take the Application Form to the labour administration authority of the province， autonomous region or municipality directly under the central government or the labour administration authority at the regional and municipal level authorized by such authority where such unit is located and carry out approval procedures. The labour administration authority of the province， autonomous region or municipality directly under the central government or the labour administration authority at the regional or municipal level authorized by such authority shall designate a specialist authority （hereafter “Permit Issuing Authority”） to be specifically responsible for the issue of Permits. The Permit Issuing Authority shall carry out approval in accordance with the opinions of the Authority in Charge of the Industry and situation in respect of the demands of the labour market， and shall issue a Permit to the employing unit after approval.

　　Article 13　When an employing unit at the central government level or an employing unit with no Authority in Charge of the Industry hires a foreigner， such unit may proceed directly to the Permit Issuing Authority of the labour administration authority to submit an application and carry out procedures in respect of a work permit.

　　The employment of foreigners by foreign investment enterprises is not subject to examination and approval by the Authority in Charge of the Industry. A foreign investment enterprise may proceed directly to the Permit Issuing Authority of the labour administration authority and obtain a Permit on the strength of its Contract， Articles of Association， Approval Certificate， Business Licence and other documents as specified in Article 11 hereof.

　　Article 14　The authorized unit must send the visa notification and Permit to the proposed foreign employee. An employing unit approved to hire foreigners may not directly issue a Permit to a proposed foreign employee.

　　Article 15　A foreigner whose employment in China has been approved shall proceed to a Chinese embassy， consulate or consular office abroad and apply for a work visa on the strength of the Permit issued by the Ministry of Labour， the letter or telegram of notification from the authorized unit and a valid passport or Passport Substitute Documents of his or her country.

　　Persons who conform to the provisions of section （1） of Article 9 hereof shall apply for a work visa on the strength of the letter or telegram of notification of the authorized unit. Persons who conform to the provisions of section （2） of Article 9 hereof shall apply for a work visa on the strength of the letter or telegram of notification issued by the China National Offshore Oil Corporation. Persons who conform to the provisions of section （3） of Article 9 hereof shall apply for a work visa on the strength of the letter or telegram of notification of the foreign affairs office of the People’s Government of the relevant province， autonomous region or municipality directly under the central government and the approval document of the Ministry of Culture （issued through the relevant embassy， consulate or consular office abroad）。

　　Persons who conform to the provisions of section （1） of Article 10 hereof shall apply for a work visa on the strength of the letter or telegram of notification of the authorized unit and the document concerning the co-operative exchange project. Persons who conform to the provisions of section （2） of Article 10 hereof shall apply for a work visa on the strength of the letter or telegram of notification of the authorized unit and evidence of registration of the administration for industry and commerce authority.

　　Article 16　Within 15 days from the date that a foreign employee has entered the People’s Republic of China， the employing unit shall proceed to the original Permit Issuing Authority with the Permit， the labour contract entered into with the foreign employee and his or her valid passport or Passport Substitution Documents to obtain an Employment Certificate for the foreigner and complete a Registration Form for Employment of Foreigners.

　　Employment Certificates shall be valid only within the region specified by the Permit Issuing Authority.

　　Article 17　Foreigners who have obtained an Employment Certificate shall take their Employment Certificate to the public security authority and apply for residence permits within 30 days after entering the People’s Republic of China. The term of effectiveness of the residence permit may be determined in accordance with the term of effectiveness of the Employment Certificate.

　　PART FOUR　LABOUR MANAGEMENT

　　Article 18　Employing units shall enter into labour contracts with foreign employees according to law. The maximum term of the labour contract may not exceed five years. The labour contract shall terminate upon expiration of its term， but may be extended after performing the examination and approval procedures as specified in Article 19 hereof.

　　Article 19　The Employment Certificate shall expire upon expiration of the term of the labour contract entered into by the foreign employee and the employing unit. If an extension is required， the said employing unit shall submit an application for extension of the employment term to the labour administration authority within 30 days prior to the expiration of the original contract and， upon approval， shall carry out procedures for extension of the Employment Certificate.

　　Article 20　Within 10 days after extension of the term of employment in China or change in the region or unit of employment of a foreigner has been approved， the foreigner shall proceed to the local public security authority to carry out procedures in respect of extension or amendment of his or her residence documents.

　　Article 21　An employing unit shall promptly report rescission of the labour contract between a foreign employee and the employing unit to the labour and public security authorities， return the Employment Certificate and residence documents， and proceed to the public security authority to carry out procedures in respect of leaving the People’s Republic of China.

　　Article 22　Wages paid to the foreign employee by the employing unit may not be lower than the local minimum wage standard.

　　Article 23　Working hours， rest， holidays， labour safety and hygiene and social insurance of foreigners employed in China shall be handled in accordance with relevant state regulations.

　　Article 24　The employing unit of a foreigner employed in China must be the same as the unit specified in his or her Employment Certificate.

　　A foreigner who changes his or her employing unit within the region specified by the Permit Issuing Authority but continues to engage in the original occupation must obtain the approval of the original Permit Issuing Authority and carry out procedures for amendment of his or her Employment Certificate.

　　A foreigner who leaves the employment region specified by the Permit Issuing Authority or changes his or her employing unit and engages in a different occupation within the specified region must carry out procedures for an employment permit anew.

　　Article 25　If the resident status of a foreigner is revoked by the Chinese public security authorities due to violation of Chinese laws， the employing unit shall rescind the labour contract and the labour authority shall cancel the Employment Certificate.

　　Article 26　Labour disputes which arise between the employing unit and the foreign employee shall be handled in accordance with the PRC， Labour Law and the PRC， Handling of Labour Disputes in Enterprises Regulations.

　　Article 27　The labour administration authority shall carry out an annual inspection of Employment Certificates. Within 30 days prior to the end of each full year of employment of a foreigner， the employing unit shall proceed to the Permit Issuing Authority of the labour administration authority to carry out procedures in respect of the annual inspection of the Employment Certificate on behalf of the foreign employee. If this term is exceeded， the Employment Certificate shall automatically become ineffective.

　　If the Employment Certificate of a foreigner is lost or damaged during the period of his or her employment in China， such foreigner shall proceed immediately to the original Permit Issuing Authority to carry out procedures in respect of reporting the loss of， replacement or exchange of the Certificate.

　　PART FIVE　PENALTIES

　　Article 28　If a foreigner fails to obtain an Employment Certificate and obtains employment without authorization， or an employing unit fails to obtain a Permit and employs a foreigner without authorization in violation of these Regulations， the public security authorities shall handle the matter in accordance with Article 44 of the PRC， Control of the Entry and Exit of Foreigners Law Implementing Rules.

　　Article 29　The labour administration authority shall recover the Employment Certificate， and request the public security authorities to rescind the resident status of a foreigner who refuses inspection of his or her Employment Certificate by the labour administration authorities， or changes his or her employing unit or occupation or extends the term of his or her employment without authorization. If a foreigner has to be deported by such authority， deportation expenses shall be borne by the employing unit or by such foreigner.

　　Article 30　If a foreigner or an employing unit falsifies， alters， misuses， assigns， buys or sells an Employment Certificate or Permit， the labour administration authority shall recover the Employment Certificate or Permit， confiscate the illegal income and impose a fine of not less than Rmb 10，000 and not more than Rmb 100，000. In serious cases where a criminal offence is constituted， the matter shall be handed over to the judicial authorities， and criminal liability shall be pursued according to law.

　　Article 31　If the working personnel of the Permit Issuing Authority or the relevant authorities abuse their functions and powers， collect fees illegally or practice graft and a criminal offence is constituted， criminal liability shall be pursued according to law. If no criminal offence is constituted， administrative penalties shall be imposed.

　　PART SIX　SUPPLEMENTARY PROVISIONS

　　Article 32　The employment in mainland China of residents of the Chinese regions of Taiwan， Hongkong and Macao shall be handled in accordance with the Administration of the Employment in Mainland China of Taiwan， Hongkong and Macao Residents Regulations.

　　Article 33　These Regulations do not apply to the employment of foreigners in the Chinese regions of Taiwan， Hongkong and Macao.

　　Article 34　The employment of foreigners by individual economic organizations and individual citizens is prohibited.

　　Article 35　The labour administration authorities of the provinces， autonomous regions and municipalities directly under the central government may formulate detailed implementing rules for their region pursuant to these Regulations together with the public security authorities， and submit the same to the Ministry of Labour， the Ministry of Public Security， the Ministry of Foreign Affairs and the Ministry of Foreign Trade and Economic Co-operation for the record.

　　Article 36　These Regulations shall be interpreted by the Ministry of Labour.

　　Article 37　These Regulations shall be implemented from 1 May 1996. The Concerning Employment in China of Foreigners Who Have Not Obtained Residence Documents and of Foreigners Studying in China Several Regulations promulgated on 5 October 1987 by the former Ministry of Labour and Personnel and the Ministry of Public Security shall be repealed on the same date.

       The labour rules in China are a big family. There are national rules which could apply to entire China, and also there are local rules which only apply to local labour relation. Sometimes, the local rules may conflict with national rules. Even according to legislation  law, we shall apply to national rule when there are conflicts, the local authorities prefer local rules.

New Rules and Old Rules

       Due to there are a lot of revolutions of labour law in China,  we shall know which rules are applicable—new rules or old rules?

       New rules are only apply to the labour relations  after they are promulgated.

• The working hour system of part time labour:

            1. The remuneration is generally calculated on hourly basis;

            2. The average working hours of a worker per day shall not be more than four hours and the cumulative working hours per week for the same employer shall not be more than 24 hours;

• The form of the Labour Contract:

             Both parties may conclude an oral agreement.

• The labour relation of part time is not exclusive.

         Any worker that conducts non-full-time labor may conclude labor contracts with one employer or more, but no labor contract concluded later may influence the performance of the labor contract concluded previously.

• No probation period

          The employer shall not stipulate clauses of probation period in Part time labour contract.

• No requirements of notice in advance and compensation when terminating the relation.

             Either of the parties related to non-full-time labor may notify the other party to terminate the labor at any time. When terminating any non-full-time labor, the employer shall pay no economic compensation to the worker.

• The standards for the remuneration

             The minimum hourly salary rates are prescribed by local government.

             The minimum hourly salary in Shanghai (2011) is 11RMB, and social insurance is not included in this salary.

• The remuneration shall be paid  within 15 days.

Recruitment requirements are the requirements illustrated in recruitment advertising,  not some requirements the employer could come up with  during the probation time. Thus, don’t try to fire any employee by reason of incapability of doing one’s job unless this reason  is stipulated in your recruitment advertising.

Unfortunately, the enterprises always ignore the importance of recruitment advertisement. I have to suggest that the more concrete the recruitment ads are, the better it will be.