The China Human Resources Issues

March 2005 China Briefing

In this issue we deal with Human Resource issues in China, including variables in salaries, mandatory welfare payments, discuss various aspects of Chinese labour law, including risks and staff liabilities, inheriting staff when involved in an acquisition, as well as dealing with issues concerning staff dismissals. The lead article, "Costs & Risks When Under-Declaring Staff Salaries in China" is by Alberto Vettoretti, Regional Partner, Dezan Shira & Associates South China, and discusses the deemed income and cost-plus methods of calculating expenses and overheads for Representative Offices, as well as itemizing a list of non-compliant activities RO often engage in when operating in China - and the risks and penalties associated with these. Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates chips in with a piece "Inheriting Staff Via China Acquisitions - Due Diligence When Assessing Staff and Pension Liabilities When Establishing Joint Ventures or Acquiring a Chinese Company", Mark Duan, in-house legal counsel for Dezan Shira & Associates Beijing, writes on "Dismissing Chinese Employees" while Sabrina Zhang, Lulu Zhang, Robbie Wang and Sharon Su, from Dezan Shira & Associates offices in Beijing, Shanghai, Dalian and Shenzhen jointly comment on "Mandatory Welfare Payments When Hiring Chinese Employees" with comparisons of the different rates between different levels of staff and between different cities in China, including Beijing, Tianjin, Dalian and Xi’an, in North China; Shanghai, Nanjing, Suzhou & Ningbo in East China; Shenzhen, Guangzhou, Zhuhai & Kunming in South China, and Qingdao, Wuhan, Chongqing and Chengdu.