Human Resources & Payroll

Navigating HR Audits in China – New Issue of China Briefing Magazine

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HR Audit China coverThe latest issue of China Briefing Magazine, titled “Navigating HR Audits in China“, is out now and available to subscribers as a complimentary download through the months of December and January in the Asia Briefing Publication Store.

Contents

  • Why HR Audits are Important for Foreign Companies in China
  • Conducting a Successful HR Audit in China
  • Getting the Most from China’s Employee Handbook

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Q&A: Labor Disputes and Labor Law Compliance in China

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By Dezan Shira & Associates

Labor disputes often arise due to companies underestimating China’s strict labor laws, or even being unaware of them in the first place. Keeping up to date with China’s labor regulations and taking the proper precautions to prevent any disputes from occurring can save employers immeasurable hassle and stress.

When companies first arrive in China, they are eager to hire staff and start their business operations. Unfortunately, this eagerness for hiring staff can lead to the company not taking the correct measures when drafting their employment contracts. Provisions that should be included in employment contracts that are often overlooked include proper overtime rules, codes of conduct, performance standards, promotion standards, KPI, etc. Ensuring that the contract includes all the relevant information will go a long way in clearing up any misunderstandings between the employee and the employer, and can prevent costly labor disputes from occurring. It is important to remember that in China, in the event of a conflict, the burden of proof always lies with the employer.

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A Complete Guide to 2016 Minimum Wage Levels Across China

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By Dezan Shira & Associates
Editor: Mia Yiqiao Jing

Editor’s note: This article was originally published on May 26, 2016, and has been updated to include the latest regulatory changes.

Rising labor costs in China have been putting pressure on foreign investors in recent years, forcing corporations to either cut down staff size or relocate to other countries with cheaper labor. The annual rates of increase from 2011 to 2015, despite slowing down, have exceeded production rates by more than 200 percent and have significantly affected China’s investment climate.

Unlike the 12th Five Year Plan, which pushed an annual 13 percent increase for minimum wages across China, the 13th Five Year Plan addresses the need for more reasonable wage levels and introduces a controlled mechanism for wage adjustment. Through a much decreased growth of minimum wage levels and stable wage adjustments, the 13th Five Year Plan aims to improve the competitiveness of enterprises in China by shortening the wage difference with other developing economies, partly in order to create stronger incentives for foreign investors to remain in or enter China. Against the backdrop of these changes, here we provide a comprehensive list of minimum wages across China for 2016 and highlight some of the major changes to the Chinese labor market.

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China Announces 2017 Official Holiday Schedule

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On December 1, China’s General Office of the State Council released the “Notification of Holiday Arrangements in 2017 (Guobanfamingdian [2016] No.17)”, which lays out the official national holiday schedule for 2017. China’s official holiday schedule for 2017 is as follows:

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Electronic Chops: Unauthorized Use and Legal Risk Management in China

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By Jake Liddle

A company seal, or ‘chop’, is an important component of doing business in China, as it is integral to the administration of a company and the key to legally authorize documentation. This essentially means that whoever is in possession of the company chop holds ultimate authority over a company. An electronic chop is the digital version of its physical counterpart, and can be used for online transactions, including financial and contractual ones. For this reason, the misuse of electronic chops is a common issue met by many companies in China, which can have severe financial and legal implications.

An updated version of China’s Electronic Signature Law was released in April 2015, which clarifies and standardizes the legal validity of electronic signatures, of which electronic chops fall under the jurisdiction. This article explores how to correctly deal with and avoid the misuse of electronic chops by employees, and how to keep compliance with the updated Electronic Signature Law.

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Obtaining China’s New Unified Foreign Work Permit

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By Dezan Shira & Associates
Editor: Ari Chernoff

Editor’s note: This article was originally published on May 17, 2012, and has been updated to include the latest regulatory changes.

On November 1, 2016, China’s State Administration of Foreign Experts Affairs (SAFEA) launched the new unified work permit in select regions across the country. The limited release targets the regions of Beijing, Shanghai, Tianjin, Anhui, Guangdong, Hebei, Shandong, Sichuan, and Ningxia, as the government seeks to gauge the program’s success before the nationwide rollout on April 1, 2017.

China’s previous foreign work permits, the Alien Employment Permit (Z-visa) and the Foreign Expert Permit (R-visa), have been integrated into the Permit System for Foreigners in China, a single work permit based on a three-tiered classification system. The permit provides a federal model administered by SAFEA, eliminating the often troublesome and inconsistent regionally administered policies.

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Outsourcing Payroll and HR Management: Q&A with Adam Livermore

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Interviewer: Zhou Qian

Payroll covers all aspects of paying a company’s employees. This includes making sure that salaries are paid in the correct amount and on time, that income tax is withheld, and that social security contributions are made. Underpaying a valued team member by accident can impact staff retention. Paying salary to an employee that has already left is equally problematic, though for different reasons. One would be surprised to learn how often these issues occur, or more shockingly, how often employees are involved in defrauding these funds.

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Name and Shame: Employers’ Labor Law Violations to be Made Public in China

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By Dezan Shira & Associates
Editor: Jake Liddle

The Ministry of Human Resources and Social Security (MOHRSS) has issued provisions for labor and social security offences committed by employers to be made public. The law, which will come into effect January 1, 2017, will apply to all companies operating in China that commit significant violations, and will serve as a powerful deterrent to companies who are not compliant with China’s labor regulations.

The following violations will be published:

  • Reduction or failure to pay employees’ remuneration without reason
  • Failure of payment or enrollment in social insurance premiums
  • Violation of working hours or holiday/leave requirements
  • Violation of special provisions for female and underage employees
  • Violation of child labor laws
  • Other labor violations which have serious negative consequences on society

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