How should enterprises legally employ foreign employees?

Author of this article: attorney of Win and Win Law Firm

In recent years, China’s opening to the outside world and the continuous improvement of the opening level, more and more foreigners choose to work in China, and attracting international high-end talents to work in China is also an important means to improve the international competitiveness of Chinese enterprises. According to China’s current laws, the employment of foreign employees has certain particularity in legal provisions, employment procedures and dispute resolution. How should enterprises legally employ foreign employees?

1.The employment permit shall be handled for foreign employees and the relevant provisions on the extension and cancellation of employment permit shall be observed

According to the regulations on the administration of foreigners’ employment in China, employers need to apply for a work permit for foreigners. If the foreigner does not apply for a work permit or does not apply for an extension after the permit expires, the foreigner is “illegal employment”. In the case of “illegal employment”: 1. According to the entry-exit administration law, foreigners may face the risk of administrative punishment of fines or even detention, and employers may face the risk of fines; 2. According to the interpretation of the Supreme People’s Court on Several Issues concerning the application of laws in the trial of labor dispute cases (IV), there is no labor relationship between the employer and the foreigner, and the labor contract law and other laws regulating labor relations are not applicable.

When the employment permit expires, if the employer continues to employ foreigners in the original position, it shall apply for extension no later than 30 days before the expiration of the permit. If a foreigner’s labor contract is terminated before its expiration, the employer shall apply for cancellation of the foreigner’s work permit within 10 working days after the date of termination.

2. Precautions for signing contracts with foreign employees
The term of the contract shall not exceed 5 years. According to the regulations on the administration of foreigners’ employment in China, the employer and the employed foreigners shall conclude a labor contract according to law, and the term of the labor contract shall not exceed five years. Therefore, no matter whether a foreign employee has worked in the employer for ten consecutive years or has entered into two fixed-term labor contracts, the employer shall not enter into an open-ended labor contract with the foreign employee.