My law firm’s China employment lawyers have done a ton of China employer audits this year and from those we compiled the following list of the most common “warning signs” of impending employment problems.
1. All or some of your employment documents are in English only.
If your employment documents are in English, you are giving your employees a valid defense for not abiding by them. Nearly all Chinese courts and arbitrators will refuse to enforce such contracts/documents or just rule in the employee’s favor. You are almost certainly not going to be able to enforce your English language employment documents and yet your employees will be able to sue you for what you put in them, including any provisions that violate Chinese law. Your remedy is compliant documents with the English and the Chinese in one document.
2. All or some of your employment documents are in Chinese only.
This is very common and almost always a big mistake. You need your employment contracts and agreements to be in both English and Chinese and these two languages should be drafted together in each document, not as separate documents. You need both Chinese and English unless ALL your relevant higher level employees (typically your HR personnel and management or anyone else who oversees your employees in China) can read and understand written Chinese perfectly. Separate documents can lead to all sorts of problems. For example, when one version gets updated or amended and the other version does not this happens all the time) you have a problem. Having separate documents also creates document retention headaches. Much of the time when we see the employment documents in just Chinese they were drafted by a “trusted” Chinese employee, not by an HR expert, and this usually means they fail to comply with either the national or the local employment laws AND they favor the employees. This situation also commonly leads management to make employee decisions that run counter to what their own documents say simply because they do not know what their documents say. Your remedy is compliant documents with the Chinese and English versions in one document. Your remedy is to get your employment law documents into all languages that will make things easy for you and your employees.
3. You get many employee questions regarding your employment documents/employment policies.
For example, your company recently implemented a new leave of absence policy and many employees are asking whether they are eligible and what they need to do to get the leave. This does not necessarily mean the relevant document is unworkable or the provision needs a re-writing, but it usually means you should seek to make the document/provision clearer. Similarly, if your employees frequently have questions about issues not addressed in your documents, you likely should put the answers in your employer rules and regulations or your employment contracts.
4. Your employer documents were implemented years ago.
China’s national and local employment laws and rules constantly change. Local interpretations and enforcement policies also constantly change as well. See China Employment Law: Local and Not So Simple. Just last week, we got an email thanking us for our China employment law book and saying his new China WFOE had used that book and our blog posts to draft all of its employment documents. Our lawyer wrote back with the following:
Using our blog posts and our book to draft your employment documents is a huge mistake. These are meant to give you general information and general guidelines, but much of what we write becomes outdated soon after we write it and much of it will not apply to your specific locale or to your specific industry or to your specific situation. You need real employment law help and fast.
Your remedy is to have someone who truly understands Chinese national and local employment laws review your employer rules and regulations at least once a year and, ideally, audit your entire HR program at the same time.
5. Your China office(s) has undergone or will be going through a significant change.
Your employment documents need to fit your existing situation, not what it was a week ago when you were half or twice your size or in one city, not three. Your remedy is to be sure to stay current.
6. Some or all your employment agreements are not signed or chopped.
Check now to make sure all your employees have signed the latest version of your employment contracts and that you have written acknowledgments confirming receipt of your latest version of your employer rules and regulations. If either is not the case, your remedy should be to do what it takes to update what you need to update and get signed what you need to have signed.
Bottom Line: If you see your company in the above, get moving. Now.