In China, employment offer letters (录用通知书) are written documents employers give to employees stating the employer’s intent to enter into a labor relationship with the employee. These offfer letters typically propose the employee’s work title, work location, wages, and the term of the employment arrangement.
Despite the relatively common use of employment offer letters in China (especially by state-owned enterprises) no Chinese law specifically addresses them. For that reason and for the reasons set forth below, employers should be careful in using them.
Despite what many believe, offer letters are not an official labor contract and they do not satisfy China’s legal requirement that labor contracts be in writing. Under Chinese law, an offer letter is considered an employer’s unilateral act expressing its willingness to enter into an employment relationship with a potential employee. An offer letter is an “offer” (要约) governed by China’s Contract Law, not by China’s Labor Contract Law. A labor contract is a legal document evidencing the existence of a labor relationship between the employer and the employee, but an offer letter has no such effect. So even when an employee returns a signed offer letter, to be in compliance with Chinese law the employer must execute a formal labor contract with the employee within one month after the employee begins working for the employer.
Under China’s Labor Contract Law, an employer can be required to pay its employees twice the employees’ monthly salary if it fails to execute a written labor contract within one month of commencement of the employment relationship, and if the employer goes more than a year without having a written labor contract with an employee, the employee lacking the written labor contract will be deemed to have entered into an open-term labor contract with its employer, which essentially means there is no definitive end date to the labor relationship.
Most of the offer letters our China lawyers have been given to review contained statements that violate China labor laws. This alone makes it a bad idea to refer to an offer letter in any eventual labor contract. But on top of this, nearly offer letters we see usually contain terms that conflict with the labor contracts and/or other employment agreements, such as the employer rules and regulations.
When an offer letter makes sense for our clients, we usually recommend they insert a provision in the formal labor contract, explicitly providing that the labor contract supersedes the offer letter.
If you are going to use an offer letter, you should, at minimum, make sure of the following:
- It does not violate any China laws.
- You have a written labor contract with the employee to whom you sent the offer letter.
- Your written labor contract clearly provides that it supersedes the offer letter.
