Frequent-Asked Questions Regarding Employment of Foreigners in China

Question 1：Who would be considered as foreigners under the?Provisions on the Administration of the Employment of Foreigners in China？

Answer：

With the increasing demand for foreign workers in special jobs or positions in China, the employment of foreigners is becoming common. According to the?Provisions on the Administration of the Employment of Foreigners in China,“foreigners” means the personnel who do not have Chinese nationality, and“employment of foreigners in China” means that foreigners without permanent residence status engage in social labor and receive remuneration under the law within the territory of China.

Therefore, when hiring foreign employees,?companies need to confirm whether they have Chinese nationality or permanent residence status. Companies should not identify an employee as a foreigner simply by his/her skin color or ethnicity.

Question 2: How do foreigners and companies establish legal employment relations in China?

Answer：

China has strict regulations and restrictions on the employment of foreign employees. To employ a foreigner, a company shall apply for a work permit for the foreign employee, and may not employ him or her unless it has been granted approval and obtained a?License to Employ Foreigners in the People's Republic of China?(hereinafter as“Employment License”). On the other hand, foreign employees must obtain a?Foreigner Employment Permit?(hereinafter as an“Employment Permit”) to be employed in China.

Therefore, a company and a foreign employee should urge each other to apply and obtain the Employment Permit on time. Otherwise, it may be considered that there are no legal employment relations between the parties, the company may face fines from the authority and the foreigner may be deported.

Question 3: Under what circumstances does a foreign employee constitute working illegally in China?

Answer：

(1)?If a foreigner never obtains an Employment Permit while working for an employer in China, it will be considered illegal in China.?Even if the parties have signed a labor contract, the contract will be deemed invalid.

Therefore, only when a foreign employee obtains the Employment Permit, he or she is allowed to work in China and is protected under the labor law. It is essentially stressed that a foreigner who would like to work in China?shall apply for an Employment Permitwithin 15 days after he or she enters China.

(2) Foreigner's employer in China shall be consistent with the entity indicated in his or her Employment Permit. Therefore,?foreign employees can only establish labor relations with one company at the same time, and in general, they cannot work part-time or be employed through labor dispatch, otherwise, they will be considered as working illegally.

(3)?In general, foreign employees are not allowed to work outside the area specified by the permit-issuing authority, otherwise they will be considered as working illegally. However, a foreigner may reapply for Employment Permit if he or she may work in a different area from the one specified by the permit-issuing authority.

Question 4: If an employee is working illegally in China, what are the possible legal responsibilities and risks for the company and the employee?

Answer：

If a foreign employee is working illegally, he or she may be fined or detained, or?even deported.?If the company hires foreigners illegally,?they may face fines and confiscation of illegal income.

Therefore, both companies and foreign employees should exercise caution and apply for Employment License and Employment Permits on time to avoid unnecessary legal risks.

Question 5: What is the maximum term of the labor contract between a foreign employee and a company?

Answer：

The maximum term of the employment contract between a company and the foreign employee?shall not exceed five years.?

Once the employment contract concluded between a foreigner and an employer expires, the Employment Permit of the foreigner becomes invalid.?If the employment contract is to be renewed, the company should apply to the relevant department?within 30 days before the expiration of the original contract and apply for the extension of the foreign employee's employment permit.

Therefore, it is generally considered that foreign employees are not subject to the provisions of Article 14 of the Labor Contract Law, which requires an employer to sign a labor contract without a fixed term with an employee if parties have concluded two consecutive fixed-term labor contracts.

Question 6: Are a foreigner and his/her employer required to pay social insurance premiums in China?

Answer：

Yes, a foreigner and his/her employer are required to pay social insurance premiums in China.?Where a foreigner is employed in China, the employer shall handle the social insurance registration for the foreigner within 30 days from the date the Employment permit is granted.?

Where any dispute over social insurance occurs between foreign employees and employers, they may apply for arbitration or file a lawsuit under the relevant law in China.

Where the employer fails to pay social insurance premiums, the foreigner may file a complaint before the social insurance administrative department and request the employer to pay any unpaid social insurance premiums.

Author:??Peter Lee (Jianchao Li), who graduated from Fudan University, currently works at the Sunivers Law Firm based in Shenzhen, as Senior Legal Counsel and Director of CSR and also leads a team focusing on?dispute resolution?and?corporate compliance.

He has considerable experience in dispute resolution both in China and cross-border. He has worked as an in-house counsel in?a well-known?FORTUNE 500 tech company. During that period, he joined the disputes management team and handled major disputes for business. He has also spent a year working in South America, as a legal Manager in charge of?legal compliance?for a subsidiary including?employment, export control, and data protection.

He also has accumulated extensive knowledge and experience in?Charity Law, Non-Profit Organization Law,?and?ESG-related Issues.

Many thanks to?Huang Pengfei?(Legal Assistant) for her contribution to this article.

This article is for general information only and does not constitute any legal opinion of the author or his firm on a particular matter, nor should it be used for taking or not taking any action. For advice on your specific matters, please contact the author by phone (86-14776255163), or by email ([email protected]).

Copyright 2023 Jianchao Li (Peter Lee). No reproduction, copying or translation of materials without prior permission of the author.