China EOR Employment Contracts: Mandatory Clauses and Client Duties

Updated November 2026.

When a foreign company hires someone in mainland China through an Employer of Record, the worker’s labor contract is signed by the EOR’s Chinese employing entity, not automatically by the overseas client. The client still selects the employee and supervises daily work. Keeping the employment contract separate from the commercial EOR service agreement matters for payroll approvals, contract changes and lawful termination.

For a foreign company, the central question is not merely whether a provider supplies a contract template. It is whether the correct employer signs a locally compliant contract, the terms match the actual job, and the EOR and client have a workable process for payroll, changes, discipline and termination.

Which contract does a China EOR employee sign?

In the common China EOR model for an eligible role, the EOR’s local Chinese employing entity signs the employment contract with the worker. The overseas client is not automatically the employee’s formal contracting employer. The provider and client also sign a separate business-to-business EOR service agreement covering commercial charges, work allocation, approvals, reporting, liability and exit procedures.

DocumentPartiesPurpose
Local employment contractChinese legal employer and employeeWork, location, hours, compensation, social insurance, protections and lawful employment obligations
EOR service agreementEOR provider and overseas clientScope of services, fees, funding, input deadlines, approval authority, information security and termination coordination
Job description and operating policiesIssued and administered through the appropriate employer process; client provides business requirementsActual duties, reporting lines, travel, performance evidence, expenses, safety and business systems

The legal form of a proposed EOR arrangement and any labor-dispatch or other specialized rules should be reviewed for the actual business and position. An EOR label alone does not establish that every arrangement or work assignment is permitted.

Article 17: mandatory China employment-contract clauses

Article 17 of the PRC Labor Contract Law identifies mandatory content for a standard written labor contract. An EOR should use the actual Chinese employing entity’s legal details and ensure these items are complete:

Mandatory itemWhat the EOR and client should check
Employer identityCorrect Chinese entity name, registered address and legal representative or responsible person
Employee identityWorker’s name, address and valid identification document details
Contract termFixed, open-ended or eligible task-based form, with a lawful start and end framework
Work duties and placeActual job, reporting expectations, city and any approved remote or multi-site arrangements
Working time and restApplicable working-hour system, attendance, rest days and leave rules
Labor remunerationBase pay, payment timing, bonuses or commissions where applicable and applicable approval rules
Social insuranceEmployer registration, contributions and city-dependent administration
Labor protection and occupational conditionsSafe working arrangements, conditions and protection against occupational hazards
Other legally required termsAny additional provisions imposed by applicable laws or regulations

Article 17 also permits additional lawful agreements on probation, training, confidentiality, supplemental insurance or benefits. These are not substitutes for the mandatory terms. Article 16 requires an appropriately signed or sealed contract, with a copy held by each party. Do not assume a startup’s English offer letter is sufficient to replace the formal Chinese employment contract.

Sign the written contract on time: double-wage exposure

Under Articles 10 and 82 of the Labor Contract Law, the written contract should normally be concluded within one month after the employment relationship starts. If an employer exceeds one month but is still within one year without signing a written labor contract, double-wage liability may arise for the applicable period. The consequences of failing to sign a required open-ended contract are separately addressed by Article 82.

The EOR should confirm the actual employer, signing process, employee copy, start date and retention of signed records. A client should not allow the employee to begin working solely on an unsigned draft and assume the provider can retroactively eliminate the risk.

Probation is part of the employment contract

Article 19 sets maximum probation periods by contract duration: generally one month for a contract of at least three months but less than one year; two months for at least one but less than three years; and six months for a fixed term of at least three years or an open-ended term. Contracts shorter than three months and contracts for completion of a specific task cannot include probation. A particular employer and employee can agree on probation only once.

A foreign client should not insert a twelve-month probation period for a manager or restart probation routinely after a provider switch. The legal employer should review any probation clause, the wage floor and the evidence required for a lawful probation dismissal. The lawful probation duration and dismissal rules depend on the contract term, wage arrangements and documented grounds.

Working hours, location and employment conditions

A job description should reflect the worker’s actual arrangement, not merely a generic job title. Where the employee works from home, visits suppliers, travels to customer sites or covers several cities, the documents should identify the agreed primary work location, responsibilities for travel and workplace safety, attendance records, working-time approvals and any special working-hour authorization that may be needed.

Overseas managers may supervise daily work, but the EOR needs timely notice of changes that affect the labor contract or payroll. Material employment-contract changes generally require the proper written process under Article 35; simply changing settings in the client’s HR system may not be enough.

Salary, commission, social insurance and tax

Base salary, guaranteed allowances, commissions and bonuses should be specified consistently across the employment contract, compensation schedules and the EOR’s payroll instructions. The documents should say how variable pay is earned, approved, paid and treated if employment ends. The EOR can withhold individual income tax (IIT) and administer contributions only when the client provides complete, timely information, including relevant payments outside the normal China payroll cycle.

Under Article 58 of the Social Insurance Law, the employer must apply for employee social-insurance registration within 30 days of employment starting. This is a legal registration deadline, not a guarantee of how quickly EOR onboarding can occur. The applicable social insurance bases, city-specific rates and housing-fund arrangements should be checked for each worker. Those items flow into the gross-to-net payroll calculation, where IIT withholding, statutory deductions and actual employee pay must reconcile.

Intellectual property, confidentiality and data access

For technical and commercial roles, identify which work product belongs to the client, what confidential information the employee may use, and who controls equipment, accounts and source code. Cross-border access to employee or business data can involve additional requirements. Review the practical enforceability of IP assignment and confidentiality terms under the relevant Chinese legal framework, rather than assuming a Singapore or US template works unchanged.

Post-employment non-compete clauses also have statutory restrictions, including eligible employee categories, scope and economic compensation. They should be tailored and approved locally, not automatically copied from the client’s global offer letter.

Who manages performance, discipline and termination?

The client can set commercial goals and document daily performance. The EOR, as legal employer under the relevant structure, should review and implement formal employment actions. An overseas manager’s instruction to “terminate immediately” is not an independent legal ground for dismissal.

China’s Labor Contract Law has specific provisions for agreement-based termination, employee notice, employer dismissal grounds, notice, procedure and statutory compensation. Operational rules should require early consultation, evidence collection, employee communications through the appropriate employer channel, payroll reconciliation and a documented exit date. Review employee termination in China before issuing a dismissal notice.

EOR service agreement clauses the client must check

The service agreement is different from the employee’s labor contract. A startup should check the following commercial issues before signing:

ClausePractical question
Employing entity and service scopeWhich local company signs and administers the employee contract, and which city/role limitations apply?
Fee and fundingWhat is included in the fee versus payroll funding, deposits, statutory charges, FX and exceptional costs?
Payroll cutoff and approvalsWho submits hours, commissions, leave, bonuses and changes, and by when?
Employee support and disputesWho responds to employee questions, statutory inquiries and employment disputes?
Confidentiality and personal dataWhich parties access records, where is information stored and how is it returned?
Termination and transitionHow are employee exits, severance exposure, final payroll, deposits and migration to the client’s own entity handled?

The China EOR service agreement separately allocates fees, funding obligations and provider responsibilities. It should not contradict the actual employment contract or work instructions.

A practical China EOR contract review workflow

  1. Classify the role. Confirm that the proposed EOR model can support the duties, work location and any regulated activities.
  2. Identify the legal employer. Match the employing entity in the contract to the EOR’s disclosed local operating structure.
  3. Check Article 17. Verify every mandatory term and any locally applicable additional requirements.
  4. Check timing and probation. Confirm contract signature before or promptly after the start date and a lawful probation clause, if any.
  5. Reconcile compensation and payroll. Confirm salaries, variable pay, cutoff dates, IIT, insurance and housing-fund administration.
  6. Document client control. Record who directs daily work, approves travel and overtime, assesses performance and handles safety.
  7. Approve change and exit procedures. Identify how contract amendments, disciplinary action and termination will be reviewed and documented.
  8. Retain signed records. Keep the employment contract, attachments, service agreement, approvals, payslips and relevant employee communications accessible to authorized personnel.

Frequently asked questions

Does the foreign company sign the China EOR employee’s labor contract?

Typically, the EOR’s local legal employing entity signs the labor contract. The client signs a separate service agreement with the provider and manages the worker’s business duties within the agreed model.

Can a China EOR contract omit social insurance or statutory leave?

No. The contract and employment administration must comply with applicable statutory requirements; the parties cannot simply waive mandatory employer duties in a template.

Can the client impose a new probation period after switching EORs?

Not automatically. The proposed contract must be reviewed against Article 19, the identity of the new employer and the actual continuity of the employment relationship.

Is an English employment contract sufficient?

Do not assume so. The formal contract must satisfy the applicable local legal, language, signing, evidence and employee-understanding requirements. Have the actual draft reviewed for the jurisdiction and work location.

What happens when the startup establishes its own China entity?

The employee does not necessarily move automatically. Plan the exit from the EOR employer, the new employment contract, payroll/IIT changes, insurance transfers, continuity terms and any immigration implications. See EOR-to-entity transition in China.

Review the contract before the employee starts

A properly administered China EOR employment relationship requires more than a legally styled contract. The local employer, overseas client and employee need consistent terms and reliable operating controls throughout the employment lifecycle. HROne’s China EOR service can help prospective clients review the proposed employer structure, employment documentation and payroll responsibilities for suitable roles.

This content is general information and not individualized legal, tax or immigration advice. The legality of an EOR arrangement, clause requirements and employment procedures depend on the facts and applicable local law.

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