Human Resource Knowledge
Social Insurance:
China's social insurance system is a social security system established by law, aiming to guarantee citizens' right to material assistance under specific life risks.
China's social insurance mainly includes five programs: basic old-age insurance, basic medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance. Basic old-age insurance addresses the basic living needs of retirees; basic medical insurance helps payers cover medical expenses; work-related injury insurance provides medical care and living allowances to employees injured at work; unemployment insurance provides financial assistance and employment services to the unemployed; and maternity insurance provides financial subsidies and medical services to female employees during childbirth.
Employers and employees must participate in social insurance and pay social insurance premiums according to the law. This is a legal obligation of employers and cannot be changed or waived through agreements.
Housing Provident Fund
The provident fund consists of two parts: one part is paid by the employee's unit, and the other part is paid by the employee. Both parts are deposited into the individual housing provident fund account and belong to the employee. The contribution of provident funds has many benefits, including retaining talent, improving enterprise cohesion, and providing employees with low-interest policy loans. The management of the provident fund follows the principles of decision-making by the Housing Provident Fund Management Committee, operation by the Housing Provident Fund Management Center, storage in special bank accounts, and financial supervision.
The contribution rate of the housing provident fund varies depending on the region and specific policies, but the minimum contribution rate for units and employees in designated cities is generally no less than 5%, and the maximum is generally no more than 12%, with a total contribution rate of 10% to 24%.
Employment Forms:
Full-time employment: The most common employment method, specifying working hours and duration, characterized by stability and permanence.
Labor dispatch employment: A form of employment where a labor dispatch agency signs an employment contract with the dispatched worker and assigns the worker to another employer. This is suitable for temporary, auxiliary, or replacement positions.
Part-time employment: Primarily paid by the hour, with the employee's average daily working hours generally not exceeding four hours and the total weekly working hours not exceeding 24 hours in the same employer.
Duration of Employment Contracts:
Employment contracts are categorized into fixed-term, indefinite-term, and those with a completion date.
Fixed-term employment contract: An employment contract where the employer and employee agree on a contract termination date.
Indefinite-term employment contract: An employment contract with no specified termination date. This includes the following situations: an employee who has worked continuously for the employer for 10 years; when an employer first implements an employment contract system or a state-owned enterprise reforms and re-establishes an employment contract, if the employee has continuously worked for the employer for 10 years and is less than 10 years from the legal retirement age; when two fixed-term employment contracts are consecutively signed, and the employee does not meet specific conditions, when renewing an employment contract; if the employer has not signed a written employment contract with the employee within one year from the date of employment.
Contract based on completion of work: An employment contract where the employer and employee agree on the completion of a specific work as the contract term.
Establishment of Labor Relations:
The employer establishes a labor relationship with the employee from the date of employment, not the date of signing the employment contract.
Form of Employment Contract:
When establishing a labor relationship, a written employment contract should be signed, not an oral agreement. For part-time employment, both parties may enter into an oral agreement.
Deadline for signing employment contracts:
If a labor relationship has been established but a written employment contract has not been signed at the same time, a written employment contract should be signed within one month of the start of employment.
Illegal Liabilities:
If an employer fails to sign a written employment contract with an employee within one month but less than one year from the start of employment, the employer must pay the employee double the monthly wage.
The regulations on probationary periods mainly include duration, number of times, inclusion, and salary.
Duration: Depending on the term of the employment contract, there are clear time limits for the probationary period. For employment contracts of more than three months but less than one year, the probationary period shall not exceed one month; for employment contracts of one year or more but less than three years, the probationary period shall not exceed two months; for fixed-term employment contracts of three years or more and indefinite-term employment contracts, the probationary period shall not exceed six months.
Number of times: The same employer can only agree on one probationary period with the same employee and cannot repeatedly agree on a probationary period.
Inclusion: The probationary period is included in the term of the employment contract. If the employment contract only stipulates the probationary period, the probationary period is not valid, and that period is considered the term of the employment contract.
Salary: During the probationary period, the employee's salary must not be lower than the lowest salary of the same position in the unit or 80% of the salary agreed upon in the employment contract and must not be lower than the minimum wage standard of the employer's location.
Termination of Employment Contract: This refers to the termination of the performance of the employment contract by both parties in advance, ending the labor rights and obligations of both parties. The termination of employment contracts is mainly divided into three situations: termination of the employment contract by mutual agreement, termination of the employment contract by the employee unilaterally, and termination of the employment contract by the employer unilaterally. An employee may terminate the employment contract by giving the employer 30 days' written notice. An employee may terminate the employment contract during the probationary period by giving three days' notice to the employer.
Mutual agreement to terminate the employment contract: As long as both parties reach an agreement, the content, form, and procedure do not violate the prohibitive and mandatory provisions of the law.
Unilateral termination of the employment contract by the employee: That is, when the conditions stipulated by law are met, the employee has the right to unilaterally terminate the contract without the need for mutual agreement or the consent of the employer.
Unilateral termination of the employment contract by the employer: There are mainly three situations, including employee misconduct, employee incompetence, and employer's business difficulties.
Economic Compensation:
Economic compensation is paid to the employee based on the number of years worked at the company, with one month's salary paid for each full year. For periods of more than six months but less than one year, it is calculated as one year; for periods of less than six months, half a month's salary is paid as economic compensation.
If an employee's monthly salary is more than three times the average monthly salary of employees in the region in the previous year, as published by the municipal government of the municipality or city where the employer is located, the economic compensation shall be paid at three times the average monthly salary of employees, and the number of years for which economic compensation is paid shall not exceed twelve years.
The monthly salary referred to in this article means the average salary of the employee in the twelve months prior to the termination or expiration of the labor contract.
Regulations on Overtime Pay:
If an employer arranges for an employee to work outside of the legally stipulated working hours after the employee has completed the work quota or the specified work tasks, based on actual needs, wages shall be paid according to the following standards:
(1) If an employer legally arranges for an employee to work overtime beyond the daily legally stipulated working hours, wages shall be paid to the employee at no less than 150% of the employee's hourly wage rate stipulated in the labor contract;
(2) If an employer legally arranges for an employee to work on a rest day and cannot arrange for compensatory time off, wages shall be paid to the employee at no less than 200% of the employee's daily or hourly wage rate stipulated in the labor contract;
(3) If an employer legally arranges for an employee to work on a statutory holiday, wages shall be paid to the employee at no less than 300% of the employee's daily or hourly wage rate stipulated in the labor contract.
For employees who are paid by piecework, if the employer arranges for overtime after the completion of the piecework quota, wages shall be paid according to the above-mentioned principles, at no less than 150%, 200%, and 300% of their piecework unit price for the legally stipulated working hours, respectively.
For those who have been approved by the labor administrative department to implement a comprehensive calculation of working hours, the part of the comprehensive calculation of working hours that exceeds the legally stipulated working hours shall be regarded as overtime, and wages for overtime shall be paid according to these provisions.
The above provisions do not apply to employees who work under a flexible working hours system.
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