The Labor Contract Law of the People’s Republic of China

China Briefing

This timely and important issue details the changes foreign invested companies in China must make to their employment contracts for all staff in lieu of China’s new labor contract law which kicks in from 1st January 2008. The law significantly alters the basis of employment and introduces new employer liabilities. We identify the content of the new law, comment on issues such as the new liabilities and contractual obligations, including written forms, probation periods, confidentiality and non-compete clauses, fixed and open ended contracts, part time employment and rules over payment of wages and welfare, in addition to commentary on severance and termination. We also identify what foreign investors need to prepare for in order to obtain compliance prior to the 1st January deadline and provide a hotline for assistance.