Employment relationships in Mainland China are primarily governed by the Labor Law of the PRC (1994) and the Labor Contract Law of the PRC (2008), supported by the Social Insurance Law, the Regulations on Paid Annual Leave, and a large body of provincial and municipal rules. These laws apply to both Chinese and, in most respects, foreign employees working under a Chinese employment contract.

The national statutes set the minimum standards that every employer must meet, covering areas such as:

• Written employment contracts and probation
• Working hours, rest days, and overtime
• Minimum wage, statutory leave, and public holidays
• Termination, notice, and economic compensation (severance)

Employers may offer terms more generous than the statutory minimum, but any clause that falls below it is unenforceable. Because many figures—minimum wage, social-insurance rates, sick-leave pay, and the severance cap—are set at city or provincial level, employers should always confirm the local rules for the specific city of employment.

Unlike many jurisdictions, China requires a written employment contract. It must be signed within one month of the employee's start date. If an employer fails to do so, it must pay double wages for each month worked without a written contract, from the second month up to a maximum of 11 months. If no written contract is signed within a full year, the employee is deemed to hold an open-ended (non-fixed-term) contract.

Contracts may be fixed-term, open-ended, or for the completion of a specific task. The permitted probation period depends on the contract term, and an employer may agree a probation with the same employee only once:

Under the standard working-hours system, the limits are:

• Standard working hours may not exceed 8 hours per day and 40 hours per week, normally over a 5-day week.
• Employees are entitled to at least one rest day per week.
• Overtime is capped at 3 hours per day and 36 hours per month, and generally requires the employee's agreement.

Alternative "comprehensive" and "non-fixed" (flexible) working-hour systems exist for certain roles but require government approval. Where overtime or rest-day/holiday work occurs, the following statutory premium rates apply (based on the employee's normal wage):

China has no single national minimum wage. Instead, each province, and often each city or district within it, sets its own monthly minimum wage (for full-time staff) and hourly minimum wage (for part-time staff), reviewed at least every few years.

Rates are highest in first-tier cities such as Shanghai, Beijing, Shenzhen, and Guangzhou, and lower in inland provinces. Because the figures are revised regularly and vary widely between locations, employers should always confirm the current rate for the specific city of employment before setting salaries. The local minimum wage also serves as the reference for calculating certain benefits, such as sick-leave pay floors.

China guarantees several categories of statutory leave nationally, with many being topped up by provincial regulations. Employers may offer more, but not less, than these minimums.

China observes statutory public holidays each year, totalling around 13 days. The main holidays are New Year's Day, Spring Festival (Lunar New Year), Qingming (Tomb-Sweeping) Festival, Labour Day, Dragon Boat Festival, Mid-Autumn Festival, and National Day (Golden Week). The State Council publishes the exact dates and "make-up" working weekends each year.

Work performed on a statutory public holiday must be paid at 300% of the normal wage and, unlike rest-day work, cannot be offset by compensatory time off. Spring Festival and the National Day Golden Week are the year's longest breaks and materially affect delivery and staffing schedules.

China provides strong protection against dismissal. An employer generally cannot terminate an employee "at will"; it must rely on a specific statutory ground. The main routes are:

• Mutual agreement — both parties agree to end the contract; severance is normally payable if the employer proposes it.
• Termination with 30 days' notice (or one month's pay in lieu) — for defined "no-fault" reasons such as incapacity after medical leave, proven incompetence after training/reassignment, or a major change in circumstances.
• Summary dismissal — for serious misconduct under Article 39 (e.g. serious breach of rules, serious dereliction of duty); no notice or severance is due.

Statutory economic compensation ("N") is one month's salary per full year of service. A period of 6 months to under 1 year counts as one year; under 6 months counts as half a month. The monthly figure is the employee's average wage over the last 12 months. The common shorthand is:

Hiring in Mainland China requires careful adherence to the Labor Law and Labor Contract Law, plus the many rules set at provincial and city level. Getting the essentials right—written contracts within one month, correct probation limits, overtime premiums, statutory leave, and lawful termination with the correct N, N+1, or 2N compensation—builds a strong, compliant foundation for your workforce. Because minimum wage, social insurance, and severance caps vary by city, working with an HR partner experienced in Chinese labour law helps ensure a smooth and compliant hiring process.

Book a call with us today to learn how we can support your hiring needs in China.