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Several legal issues in employing foreigners in China

In recent years, more and more foreigners choose to work in China. 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 laws, the employment of foreign employees has certain particularity in employment procedures and dispute resolution. How should enterprises legally employ foreign employees?

1. The employment permit, the extension and cancellation of employment
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”: 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; 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. Social insurance is required for foreign employees
The Interim Measures for foreigners employed in China to participate in social insurance stipulates that “foreigners recruited according to law shall participate in basic old-age insurance, basic medical insurance, work-related injury insurance, unemployment insurance and maternity insurance for employees according to law, and the employer and himself shall pay social insurance premiums in accordance with regulations.” Therefore, foreigners legally employed in China should pay social insurance.

3. 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.

4. Settlement of labor disputes
In case of labor disputes, labor arbitration shall be initiated in accordance with the labor law, labor contract law and other laws. If one party is not satisfied with the ruling of the labor arbitration commission, he can bring a lawsuit in the people’s court.

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