{"id":24990,"date":"2025-11-28T07:51:03","date_gmt":"2025-11-28T07:51:03","guid":{"rendered":"https:\/\/msadvisory.com\/?p=24990"},"modified":"2026-04-20T11:30:49","modified_gmt":"2026-04-20T11:30:49","slug":"hiring-employees-in-china","status":"publish","type":"post","link":"https:\/\/msadvisory.com\/hiring-employees-in-china\/","title":{"rendered":"How to Hire Employees in China"},"content":{"rendered":"\t\t
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Thinking about hiring China-based talent? This guide provides a detailed overview of hiring options, labor contracts, mandatory clauses, and employer obligations in China. Whether you are considering direct hiring, labor dispatch, outsourcing, or using an Employer of Record (EOR), MSA can support you to hire your China-based team.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Hiring Options in China<\/h2>

When hiring staff, companies must consider several options, each with its regulations and implications. The three primary methods are:<\/p>

  1. Direct Hiring <\/strong>(with a local subsidiary).\u00a0<\/li>
  2. Labor Dispatch <\/strong>(without a local subsidiary)<\/li>
  3. Outsourcing <\/strong>(without a local subsidiary)<\/li>
  4. Employer of Record (EOR) <\/strong>(without a local subsidiary).<\/li><\/ol>

    Below, we explain in detail how all of these work.\u00a0<\/p>

    For a more specific guide to hiring\u00a0foreign\u00a0<\/em>employees in China, click here<\/a>.\u00a0<\/p>

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    \"Shanghai<\/a><\/figure>
    Unlock the potential of your business in China with MSA's comprehensive employment solutions. <\/a><\/div>

    Send us your question and we will answer within 24 hours.\nMessage  \u2192<\/span><\/p><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t

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    1. Hire directly through your China subsidiary<\/h3>

    Foreign-invested enterprises<\/a> can hire employees directly, but China’s Representative Offices (ROs)<\/a> cannot. ROs must use an agency to second Chinese staff, as ROs are not capitalized legal entities and cannot be sued directly by employees.<\/p>

    How to Hire Employees Directly in China<\/h4>

    The table below outlines key aspects foreign businesses must consider when managing employees in China. From the necessity of written contracts and the specifics of probation periods to the intricacies of working hour systems and mandatory social security contributions, each element plays a crucial role in ensuring compliance and fostering a productive workplace. Additionally, the table highlights the importance of understanding regional variations, the challenges of employee termination, and the financial implications of severance payments, providing a clear and concise overview of effective HR management in China.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Aspect<\/strong><\/th>Description<\/strong><\/th><\/tr><\/thead>
    Written Contracts<\/strong><\/td>Employers must sign a written contract<\/a> with employees within one month of their start date. Failure to do so entitles the employee to double salary.<\/td><\/tr>
    Probation Period<\/strong><\/td>Employers have broader grounds for dismissal during probation<\/a> and can pay 80% of the contractual salary.<\/td><\/tr>
    Working Hour Systems<\/strong><\/td>There are three main systems:
    – Standard Work Hour System
    – Comprehensive Work Hour System
    – Non-fixed (Flexible) Work Hour System<\/td><\/tr>
    Payment and Tax<\/strong><\/td>Salary packages must include base salary, allowances, bonuses, non-monetary pension plans, and social security contributions. Employers are responsible for filing IIT monthly.<\/td><\/tr>
    Mandatory Social Security<\/strong><\/td>Comprising five types of insurance<\/a> and a housing fund, both employers and employees must contribute, with the employer calculating and withholding payments.<\/td><\/tr>
    Leave During First Year<\/strong><\/td>No mandatory leave days are required in the first year, except for public holidays.<\/td><\/tr>
    Regional Variations<\/strong><\/td>Local interpretations of national laws can vary significantly.<\/td><\/tr>
    No At-Will Termination<\/strong><\/td>Terminating employees is complex and costly.<\/td><\/tr>
    Non-Fixed Term Contracts<\/strong><\/td>Employees generally must be offered a non-fixed term contract after two fixed-term contracts.<\/td><\/tr>
    Severance Payments<\/strong><\/td>These are often higher than legally mandated and have a significant HR cost.<\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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    2. Hiring through labor dispatch<\/h3>

    Labor dispatch involves a triangular employment relationship<\/a> in which a dispatch agency hires employees who work for a host company. This method minimizes the host company’s administrative burdens and legal risks.<\/p>

    When to Use Labor Dispatch for Hiring in China<\/h4>

    Labor dispatch<\/a> is ideal for businesses in the setup phase without a business license; small businesses focused on revenue over administrative tasks, and industries with seasonal or project-based needs.<\/p>

    It allows companies to hire local employees quickly and flexibly without long-term commitments.<\/p>

    Best Positions for Labor Dispatch in China<\/h4>

    Labor dispatch suits temporary positions (up to six months), auxiliary roles supporting main business functions, and replaceable temporary positions covering permanent employees. This approach provides flexibility and reduces long-term obligations.<\/p>

    Labor Dispatch Regulations in China<\/h4>

    Chinese regulations stipulate that dispatched employees should not exceed 10% of the total workforce, except for Representative Offices (ROs) of foreign enterprises. This ensures fair labor practices and limits over-reliance on dispatched workers.<\/p>

    3. Hiring through outsourcing<\/h3>

    Outsourcing is used for tasks requiring specialized skills or confidentiality, such as IT, accounting, and payroll processing. Unlike labor dispatch, outsourcing does not create a direct employment relationship with the client enterprise.<\/p>

    Key Benefits of Outsourcing in China<\/h4>