Human Resources & Payroll
By Gidon Gautel
China’s new work permit system for foreigners was rolled out nationwide on April 1 this year. The new system has introduced a three-tier talent grading system for expatriates. Expats are placed in either Tier A, B, or C, depending on the number of points they earned under the point scoring system, or by fulfilling a condition that automatically places them in a given tier.
By Jake Liddle
Shenzhen has been implementing a variety of preferential policies and subsidies to attract high-level foreign talent to the city in the last few years. This year, regulations have been amended and policies have been promulgated to incentivize living and working in the vibrant city.
Alberto Vettoretti, Managing Partner of Dezan Shira & Associates says: “The Shenzhen municipal government has been very active in formulating incentives to attract foreign and local talents to the city, which has recently become one of the most expensive in the Mainland in terms of real estate. Housing prices there have now reached levels comparable to those in Silicon Valley, but salaries are still a fraction of the US innovative hub if taken on an average basis.”
In this article, we detail three recent government initiatives that provide opportunities for foreign talent.
By Dezan Shira & Associates
Editor: Gidon Gautel
China’s new work permit system for foreigners was rolled out nationwide on April 1 this year. Under the new framework, the previous Alien Employment Permit and the Foreign Expert Permit have been combined into a single work permit, issued to any foreigner eligible to take up work in China.
The changes to the system result in a more streamlined process, doing away with inconsistent regional administration, and allows for employers to submit applications online. Furthermore, the change has removed any confusion foreigners may have had as to which permit to apply for.
The new system has also introduced a three-tier talent grading system for expatriates, the benefits of which are less clear. While A-grade expats enjoy some additional advantages, those falling in Tier B and Tier C may face tougher entry requirements, lower permit validity, and longer waiting times than before.
Op-Ed by Chet Scheltema
Gone are the days of China foreign direct investors simply choosing between an RO, WFOE, or JV. Now they are presented with a range of options and acronyms that even the most determined investor may become bewildered: PEO, EOR, VIE, HRO, ASO, BPO, etc., not to mention the traditional Dispatch and Secondment.
These alternatives have developed with the growth of the outsourcing industry in Western economies, yet they do not necessarily translate neatly into China, and they present risks to the unwary and ill-advised foreign investor.
Despite this, some consultants may heartily promote one or more of these options, and this may belie a true understanding of the local legal and business environment, and the risks each approach entails.
Op-Ed by Chet Scheltema
In Part 1, we detailed “lawful” ground for termination, and pressures in the Chinese labor dispute system to settle disputes by compromise.
As China undergoes economic transformation and shifts from an investment and manufacturing-led economy to a more consumption-based economy, labor restructuring and displacement will be a habitual occurrence of the “new normal”.
Foreign employers now need to become ever more skilled in navigating the Chinese labor law landscape. It is critical to find, and retain, experienced Chinese labor law practitioners to help your business prepare, and then respond to disputes that will likely arise.
Human Resources and Payroll in China 2017/18 (6th Edition), the latest publication from China Briefing and Dezan Shira & Associates, is out now and available for download through the Asia Briefing Publication Store.
A firm understanding of China’s laws and regulations related to human resources and payroll management is essential for foreign investors in China. This also applies to local managers and HR professionals who may need to explain complex points of China’s labor policies to employees.
Op-Ed by Chet Scheltema
Negotiated settlement is often required to sever the employment of a senior manager with minimal disruption and expense. This is nowhere more true than in China, where private dispute resolution is strongly favored.
However, in China, the labor dispute system encourages compromise and payment of severance, and in some cases, this can encourage employees to negotiate aggressively to force employers into uncomfortable concessions.
For foreigner managers accustomed to dispute resolution processes in the West, where establishing fault and faultless behavior is seen as paramount, especially where fraud or bad faith exists, a greater emphasis in China on making concessions and paying severance, even to an opportunistic employee may be a bitter pill to swallow. Yet, it may be the most practical recourse.
By Alexander Chipman Koty
In China, regional governments are authorized to set their own minimum wages according to local conditions. If adjustments to minimum wages are made, they usually occur in the first half of the year. However, the cities of Shanghai and Shenzhen and the provinces of Shandong, Fujian, and Shaanxi are the only jurisdictions that have done so in 2017.
Authorities in Shanghai, Shenzhen, Shandong, Fujian, and Shaanxi all increased their minimum wage levels. Although other regions still have ample opportunity to adjust their wages in 2017, the reluctance of a majority of provinces to increase wages in the first half of the year reflects the nationwide concern to keep wage growth in check in order to maintain competitiveness, particularly as China’s economy slows.