Yes, China has labor laws, and the framework is more detailed than many workers expect. Two statutes form the backbone: the Labor Law of the People’s Republic of China, effective January 1, 1995, and the Labor Contract Law, effective January 1, 2008.1AsianLII. Labour Law of the People’s Republic of China2National People’s Congress of the People’s Republic of China. Labor Contract Law of the People’s Republic of China Together they regulate written contracts, working hours, wages, social insurance, leave, termination, and dispute resolution. Additional statutes cover employment promotion and anti-discrimination, work safety, occupational disease, and labor dispute mediation and arbitration. The rules on paper are substantial. Enforcement, as most workers in China know, is a different question.
Written Contracts Are the Foundation
Every employer must sign a written labor contract with a new hire within one month of the start date.2National People’s Congress of the People’s Republic of China. Labor Contract Law of the People’s Republic of China Miss that window and the employer owes double wages for every month worked without a contract, counted from the second month onward.3Supreme People’s Court of the People’s Republic of China. Labor Contract Law of the People’s Republic of China If a full year passes with no written contract, the law automatically treats the relationship as an open-ended one.4International Labour Organization. Labor Contract Law of the People’s Republic of China
Three contract types exist: fixed-term, open-ended, and project-based. Open-ended contracts carry the strongest job security, and workers can demand one after ten continuous years with the same employer or after completing two consecutive fixed-term contracts without serious performance problems.4International Labour Organization. Labor Contract Law of the People’s Republic of China
Probation is allowed but strictly capped. Contracts under three months cannot include probation at all. Contracts of three months to one year permit up to one month; one to three years permit up to two months; three years or longer, including open-ended contracts, permit up to six months. Only one probation period is allowed per employee, with no extensions or repeats. Any time beyond these limits counts as regular employment.
Working Hours and Overtime
The Labor Law caps standard hours at eight per day and 44 per week.5Ministry of Commerce of the People’s Republic of China. Labour Law of the People’s Republic of China A State Council regulation issued shortly after brought the working standard down to 40 hours a week, which is what most employers follow today.
Overtime is limited to three hours a day and 36 hours a month. Premium pay is required:
- 150% of normal wages on regular workdays
- 200% on weekends, unless the employer gives compensatory time off
- 300% on statutory holidays, with no substitute time-off option
The 996 Schedule Is Illegal
China’s tech sector became known for “996” — 9 a.m. to 9 p.m., six days a week, roughly 72 hours. In August 2021 the Supreme People’s Court and the Ministry of Human Resources and Social Security jointly published model labor cases stating that 996 violates statutory overtime limits and is unenforceable. One of the featured cases involved a courier company that had fired a worker for refusing the schedule; the court ordered compensation because the termination was illegal. Employers cannot write overtime requirements exceeding the statutory caps into policy, whatever the industry norm.
Minimum Wage Depends on the City
China has no single national minimum wage. Provincial and municipal governments set their own rates based on local cost of living, so the floor varies sharply across the country. Shanghai’s monthly minimum rose to RMB 2,740 in 2025, the highest nationwide. Beijing’s hourly minimum stood at RMB 27.7 as of early 2026. Smaller cities and rural areas sit well below those figures. Rates are adjusted periodically, sometimes yearly, so checking current local numbers matters.
Social Insurance and the Housing Fund
Employers and employees both contribute to a five-part social insurance system covering pension, medical, unemployment, work-related injury, and maternity, plus a separate housing provident fund. Local governments set the exact percentages, and the employer’s share is always larger than the worker’s.
In Beijing, employees currently see roughly 10.5% of capped wages deducted for social insurance and another 12% for the housing fund, together about 22% to 23% of gross pay.6PwC Worldwide Tax Summaries. China, People’s Republic of – Individual – Other taxes Guangzhou, Shanghai, and Shenzhen apply different rates and caps, so anyone changing cities should check local figures before comparing take-home pay.
Leave and Public Holidays
Annual Leave
Paid annual leave is tied to total years of service across all employers:
- 1 to 10 years of service: 5 days a year
- 10 to 20 years: 10 days a year
- Over 20 years: 15 days a year
Workers with less than a year of total service have no statutory entitlement, though individual contracts sometimes offer more.
Public Holidays
Eleven statutory public holidays fall across seven periods each year: New Year’s Day, Spring Festival, Tomb Sweeping Festival, Labor Day, Dragon Boat Festival, Mid-Autumn Festival, and National Day. The government often extends these into longer breaks by swapping adjacent weekend days. The 2026 National Day break, for example, runs seven days, with workers making up the extra days on designated makeup Saturdays or Sundays.
Maternity Leave
The national baseline is 98 days for a normal birth, with 15 extra days for a difficult delivery and 15 more for each additional child in a multiple birth. Most provinces add local bonus days on top — commonly 60 to 90 — which brings the total in many major cities to around 158 days. A worker in Beijing gets 158 days total; one in Jiangxi gets 188. Local rules govern the actual entitlement.
Sick Leave
Workers on sick leave are entitled to a protected medical treatment period during which the employer cannot terminate them. The length runs from 3 months, for those with under 10 years of total experience and fewer than 5 years at the current employer, up to 24 months for workers with 20 or more years at the same employer. Pay during this time is generally full salary for the first two months, then reduced by seniority-based percentages.
Termination and Severance
At-will firing is not permitted. Employers need legal grounds — serious misconduct, criminal conviction, or an inability to perform the job even after training or reassignment. Economic layoffs carry additional procedural requirements.
How Severance Is Calculated
When termination triggers severance, the formula is one month of average salary for each full year of service. Partial years over six months round up to a full year; six months or less counts as half a year. Two caps apply to high earners: monthly salary is capped at three times the local average wage, and years of service used in the calculation are capped at 12. The theoretical maximum is therefore 12 months at three times the local average salary.
If the Firing Was Illegal
A worker who challenges the termination and wins in arbitration has two remedies. Reinstatement with back pay is one. The other, used when reinstatement is impractical or unwanted, is double severance under the same formula and caps. Employers cannot elect to pay standard severance and be done with it; the doubled penalty is designed to make unlawful dismissals expensive.
Non-Compete Clauses
Non-compete restrictions are allowed only for senior managers, senior technicians, and other employees with access to trade secrets. The restriction after departure cannot exceed two years. During that period, the employer must pay monthly compensation; this is not optional. A Supreme People’s Court interpretation sets a floor of 30% of the worker’s average monthly salary over the 12 months before leaving, and the payment cannot drop below the local minimum wage. If the employer stops paying, the employee can ask a court to lift the restriction.
Shanghai, Beijing, and Shenzhen each apply their own formulas for calculating compensation when the contract is silent or vague. A non-compete clause without a clear compensation commitment is likely unenforceable.
Discrimination and Workplace Safety
Chinese law prohibits discrimination in employment based on ethnicity, race, gender, and religious belief.7International Labour Organization. Employment Promotion Law of the People’s Republic of China The Law on the Protection of Persons with Disabilities separately bars discrimination in hiring, promotion, pay, and benefits based on disability. Rural migrant workers have protections against household registration (hukou) discrimination when seeking urban jobs. Proving discrimination in Chinese courts is difficult in practice, since the evidentiary burden tends to fall on the employee.
On safety, employers must meet national occupational health and safety standards, keep workplace hazards within prescribed limits, provide protective equipment, and maintain proper facilities.8International Labour Organization. Law of the People’s Republic of China on Prevention and Control of Occupational Diseases The Work Safety Law adds obligations around accident prevention, safety training, and emergency planning. Workers have the right to refuse work they reasonably believe poses imminent danger.
Trade Unions
All trade unions in China operate under the All-China Federation of Trade Unions (ACFTU). Independent unions are not permitted. Enterprise-level unions negotiate collective contracts, and individual employment contracts cannot fall below the terms of a collective agreement. When an employer breaches the collective contract, the union can file for arbitration. How assertively any given enterprise union pushes for its workers depends heavily on local circumstances.
How to Raise a Labor Complaint
Disputes follow a set escalation path: mediation, then arbitration, then court. Going directly to court is generally not an option.
Mediation can happen through an internal company committee or an outside mediation organization. If it fails or neither side wants to try it, the worker files with a local labor dispute arbitration commission.9Central People’s Government of the People’s Republic of China. Law of the People’s Republic of China on Labor-Dispute Mediation and Arbitration Arbitration is a mandatory step before litigation. A party unhappy with the arbitration award has 15 days from receiving it to sue in a local people’s court. Miss that deadline and the award becomes final.
Small claims — typically wage recovery or workplace-injury medical expenses below a local threshold — work asymmetrically. The award is final for the employer, who cannot appeal. The employee can still sue. The design blocks employers from using court appeals to stall payment on straightforward claims.
The Gap Between the Law and Daily Practice
The written protections are substantial. In practice, overtime violations remain common in manufacturing and tech, particularly for migrant workers who may not know their rights or fear retaliation. Some smaller employers evade social insurance obligations. Labor inspections happen but are uneven across regions.
For workers trying to protect themselves, three things matter most: get the written labor contract signed within the first month, since almost every legal protection flows from it; keep your own records of hours worked and wages received; and remember that arbitration, not a lawsuit, is the first legal remedy when something goes wrong.