Employee Probation Periods in China
This article provides concise information about employee probation periods in China:
- Employment contract term
- Probation period
- Salary in the probation period
- The consequences of violating the rules of probation period
If you have your own business in China, at some point in time, you may feel the need to hire local Chinese personnel. Being an employer in China, certain obligations have to be followed relating to employment contracts of your employees. Inability to follow suit will subject the employer to administrative and/or civil liability. Read further to know more about them:
Employment contract term
There are three types of employment contract terms: fixed-term employment contract, non-fixed-term employment contract, and project-based employment contract when the term is based on the completion of a specific amount of tasks.
China allows probationary periods for both local Chinese and foreign employees, as long as done right. The maximum term of probation is dependent on the term of the employment contract.
- Employment of a part-time employee
- Employment with a term of fewer than three months
- Employment whose term is based solely on the employee completing a certain task.
Salary in the probation period
An employee’s salary during his/her probation period shall not be less than 80% of the minimum wages for the same post of the employer or 80% of the wages stipulated in the employment contract, and shall not be less than the minimum wage of the employer’s location.
The consequences of violating the rules of probation
According to the China Labor Contract Law, if an employer participates in the violation of the probation rule, the employer shall be ordered to make a correction in the same by the labor bureau. If the illegally specified probation period has been completed by the employee, he/she will be paid compensation by the employer that will be calculated as per the time worked on probation beyond the statutory probation period, at the rate of the worker’s monthly salary after probation.
Employee termination during the probation period
In China, labor laws don’t allow the employer to spontaneously terminate employment contracts. They can only be permitted to do so in certain conditions specified by the Chinese labor law:
- Failure to satisfy the specified recruitment requirements during probation;
- Employee has substantially violated the labor discipline or internal rules of the employer (which have been clearly communicated to all the employees);
- Employee has committed an act that has caused substantial harm to the interests of the employer;
- Employee is subject to criminal liability;
- Employee has established an employment relationship with another employer and refuses to terminate it after being required to do so by the existing employer.
When firing an employee for whatever reason, an employer must notify all relevant labor unions. However, the labor union’s approval is not required for terminating an employee. The terminated employee must also be provided proof of termination of the employment contract, documentation of the last day of work and full-and-final settlement of dues and remaining payments. The documents should be signed by both parties and the employer shall report the termination to local social insurance authorities and keep the employee documents for minimum 2 years after termination. However, during the probation period, an employee may terminate the employment contract if he/she gives the employer three days’ notice.
The information contained in this article is valid on March 17th, 2016. For updated information, please contact us via email at email@example.com.