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How to hire remote employees in
Laws about hiring are complicated, and the same is true in China. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in China, you have two real options when it comes to hiring. We’ll detail both below.
If you want to successfully hire in
China
, you have two options:
Laws about hiring contractors are significantly more simple in
China
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
China
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
China
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
China
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
China
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in China than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in China.
PTO is calculated by the:
There are 7 public holidays, however, some regions have additional holidays.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
6 months sick leave:
Over 6 months of sick leave:
A female employee is entitled to 98 days of maternity leave and an additional 15 days in the case of difficult labor or multiple births. Some cities offer additional maternity leave for women who give birth after the age of 23.
Maternity leave is paid by the Social Security Bureau in which the woman is registered and is based on an average monthly salary over the 12 month period before the birth. Social security will either pay this rate or 3 times the minimum wage, whichever is higher. In some areas such as Beijing and China, the employer supplements the maternity pay with additional pay.
Fathers are entitled to 10 days if paid paternity leave, paid by the employer. In some cities, additional paternity leave is given.
Nursing mothers are entitled to 1 hour off per day for children under the age of 12 months old.
None.
Each city follows its own laws, which vary between 3-10 days. In Beijing and Shanghai, employees are entitled to 10 days’ marriage leave.
Varies between cities and is between 1-3 days.
In China, it is difficult to terminate an employment contract unless by mutual agreement or if an employment contract expires.
The notice period in China is:
Advance notice is 30 days for both the employee and employer. However, if the employee is on probation, 3 days’ notice can be given.
The Severance Pay in China depends:
Severance pay varies based on the reason for termination, but in general, severance is 1 month’s salary for each year of employment capped at three times the minimum wage, and cannot exceed 12 months.
The standard workweek in China is 40 hours. Employees work 8 hours per day, 5 days per week.
Limited to one hour per day, however, in special circumstances, can be up to 3 hours but limited to a total of 36 hours per month.
Overtime pay is 150% per hour for overtime during workdays, 200% per hour on rest days, and 300% per hour on official public holidays.
Employees under flexible working hours are generally not entitled to overtime payment but it requires approval from the labor bureau.
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