Employer of Record in China

As the world’s second largest economy, China and its domestic market have become a must for companies looking to leverage international growth. Once they have assessed the market’s potential and initiated the first direct business flows, companies will quickly want to set up a local presence in order to gain better visibility on the ground, support, lead or train local partners, and secure and develop their commercial flows (supplies, sales).

In China, the legal framework requires all foreign companies to have a local legal structure in order to be able to employ Chinese or foreign employees in full compliance. However, investing in the creation and management of a structure on the Chinese market can be a long and complicated process. The specific administrative requirements and very strict local regulations can often discourage foreign companies.

However, there is an alternative to setting up in China: Employer of Record services. By opting for this solution, Salveo enables you to develop your business in China by employing and managing your Chinese and/or foreign employees on your behalf within very short operational timescales, at a lower cost and in complete simplicity. You’ll save time and money. We’ll show you how!

What is Employer of Record services in China?

The staffing company in China is a third-party local entity, acting as an intermediary in an existing employee-employer relationship.

It is responsible for fulfilling the legal and regulatory requirements relating to immigration, employment and payroll.

It is therefore the legal employer for the worker, but has no supervisory role in relation to the employee’s position. The original employer maintains the substantive employment relationship, taking all decisions on remuneration, job content and development, and termination of the contract.

EOR in China with Salveo: what are the advantages?

Salary portage has many advantages. It allows to :

Have a local presence quickly and at a lower cost, without having to invest in the creation and management of a local legal structure, or while waiting for the creation process to be finalized which can sometimes take up to 6 months.
Evaluate and test the potential of the Chinese market for your project before you decide to create your own structure in the country.
Reduce risks and comprehension problems by relying on our team of local French-speaking experts.
Stay focused on your core business and business development; we manage administrative and regulatory tasks.
Create value and maintain a relationship of trust with your customers: your local presence is both reassuring and allows local contact in the same time zone.
A fast and flexible solution that adapts to the needs and objectives of your business.

Our added value? Simplify the overall management of your human resources

A subsidiary of the ADIT Group (750 employees, 156M EUR turnover), Salveo is a solid and experienced partner for supporting the development and establishment of companies internationally.

With a local French-speaking team made up of experts and a strong presence on Chinese territory for 30 years, many companies have already called on our services to entrust us with the management of their employees in China.

Via its subsidiaries in Shanghai and Shenzhen, Salveo offers pragmatic solutions in Human Resources management for companies, start-ups, SMEs or multinationals throughout China.

Concretely, we take care of the management of your employees and all associated tasks such as:

Drafting the contract in accordance with local labor law,
Support in obtaining a work permit/residence permit (for a foreign employee),
Payment of salary and sending of pay slip,
The declaration, monthly payment of social security contributions and income tax deducted at source,
The tracking of paid leave,
Control and reimbursement of professional expense reports,
Managing the end of the contract (non-renewal or dismissal)
The interface with your company for all questions relating to labor law and the employee contract

Furthermore, other optional services are also offered to you such as the recruitment of your future employees, physical accommodation in our business centers, or the management of the needs linked to the international mobility of your employees (search for apartment, school for children, vehicle rental, etc.).

Thus, choosing Salveo for your payroll operation in China means ensuring the support of an operational employee dedicated 100% to your mission by outsourcing all associated administrative constraints.

Our customers testify:

Some basic rules to know for employing staff in China

Types of employment contract in China

China offers three types of employment contract:

Fixed term (Fixed Term Contract)
Open term (permanent contract)
The “job” employment contract (the employment relationship ends when the mission is completed)

All employees must receive a written contract within one month of being hired; failing this, the employee is entitled to double his salary.

Trial period in China

The company cannot stipulate the length of the trial period as it wishes. The trial period is decided based on the duration of the employment contract.

In the table below you will find the conditions of the probation period set out by law.

Duration of the employment contract	Duration of the trial period
X ≤ 3 months or piecework contracts	No trial period
3 months ≤ X < 1 year	No more than 1 month
1 year ≤ X <3 years	No more than 2 months
3 years ≤ X	No more than 6 months

Working hours and overtime in China

The duration of working time is set at 40 hours per week (8 hours per day and 44 hours maximum per week). The duration of working time is set at 40 hours per week (8 hours per day and 44 hours maximum per week). In certain special cases, the number of overtime hours per day can be up to 3 hours.
The employer is required to pay overtime.

According to the law, the worker benefits from one day of rest during the week but most employers provide a second day.

Paid leave in China

Employees who have worked consecutively for more than 12 months are entitled to paid annual leave. Furthermore, the duration of annual leave is determined based on the cumulative work period of an employee within the same company or in several different entities.

Years of experience	Annual paid leave (days)
1 an ≤ X ≤ 10 ans	5
10 years ≤ X ≤ 20 years	10
≥ 20 years	15

Public holidays in China

Events	Date	Public holiday(s)
New Year (元旦)	January 1^st	1
Chinese New Year (春节)	Usually in January or February, depending on the lunar calendar	3
Qing Ming Jie (清明节)	5th April	1
Labour Day (劳动节)	1^st May	1
Dragon Boat Festival (端午节)	Usually in June, according to the lunar calendar	1
Mid-Autumn Festival (中秋节)	Usually in September or October, depending on the lunar calendar	1
National Day (National Day)	1^st, 2nd and 3rd October	3

Please note: in addition to the 11 public holidays, the Chinese government has put in place a system to create holidays of several consecutive days, by working on weekends to replace working days during the week.

Minimum wage in China

The minimum wage is conditioned by regional factors. These are notably evaluated according to the cost of living but also the degree of development of the region.

City	Monthly Minimum Wage (RMB) 2021
Beijing	2,320
Shanghai	2,590
Shenzhen	2,360
Wuhan	2,010
Chongqing	2,000

Termination of employment contract by employer

The company may terminate the employment contract in any of the following circumstances by informing the employee with 30 days written notice, plus economic compensation:

The employee can no longer perform his old position upon returning from illness or a non-professional work accident, and cannot adapt to the new position offered by the company.
The employee is not competent in his work despite training or adjustment of his work
The conditions under which the employment contract was concluded have undergone such modifications as to make its execution impossible, and the two parties are unable to reach an agreement on a modified employment contract

Compensation for termination of contract

In the event of early termination of the employment contract by the employer, the company is required to pay the employee severance pay. The amounts of compensation are shown in the following table:

Seniority of the employee	Compensation
Less than 6 months	50% of monthly salary (*)
From 6 months to 1 year	1 month salary
Greater than 1 year	1 month of salary per year worked (ceiling of 12 years)