In the past decades, the incomparable economic development of China led among other to an increasing overall education level. This means that the rural-urban gap is still growing as educated people go to the cities. However China’s labor force was one of the most important factors which brought China to this development, as labor force was cheap. But this situation is now changing with the slowdown of the economic growth and the increasing foreign companies which want to implement in China.
China’s employment regulatory framework can be described as quite complex, especially for companies which want to build a full local office. Thereby the best way to avoid many procedural costs and the language-related problems is to find a locally sourced payroll provider who knows the Chinese laws for both Chinese companies and employees as well as foreign companies and employees.
In China, workers must have an employment contract which is up to local standards. Companies must be able to draw up employment contracts which are also in agreement with the local standards.
The Chinese Labor law takes in the rules and regulations governing employment related to employment and is effective in all sectors and every kind of companies such as individual economic organizations, private non-profit entities and governmental companies. Employment relationships between government offices, institutions and social groups and their employees are also governed by Chinese labor law. China requires both from employees and companies a mutual written commitment. If there is no written commitment from both parties, the employment relationship can still be claimed to exist as if both parties are bound by such a contract.
The use of a written work manual is an important asset for a fruitful and fluid collaboration between the employer and the employee. The employer is obliged to specify the written procedures which guide the conduct of the employees, and the employee must follow these procedures but is also protected by them. Often the employment handbook includes a code of conduct, an ethical conduct policy. For the companies, it gives them more flexibility when it comes to human resources, because an employee disrespectful of the guidelines can be dismissed. The employment handbook is also a protection for both parties in a legal process, if one of the two party has been fraudulent.