China employment law is technical and getting technicaler (yes, I made up that last word but you know what I mean). See China Employment Law: Local and Not So Simple. It is one of the most consistent problem areas for foreign companies doing business in China and it has become a massive growth area for our law firm.
Our typical attorney-client interaction usually goes something like this:
- Foreign employer company contacts my law firm because it has terminated an employee and that employee has either sued or threatened to sue, oftentimes over a technical violation by the foreign employer.
- One of our China employment lawyers looks at the case and determines that the foreign company employer did in fact violate Chinese law in the termination and in that investigation learns that the foreign company employer committed multiple violations and if the employee were to pursue litigation or his or her administrative remedies, he or she would no doubt prevail.
- We explain the above to the foreign company employer and learn that the problems we enumerated hold true for all employees.
- The foreign company employer asks our law firm to remedy its problems and we explain that before we start remedying just the problems that came to the forefront from this one termination, we should conduct an employer audit to determine what other employment problems need fixing. See China Employment Compliance and Audits: THE New Big Thing.
- We conduct an employer audit and that invariably (like every single time) generates a laundry list of problems and then we fix them, one by one.
Why do foreign company employers have so many employment problems in China? Think about how the typical small to mid-sized companies starts in China. They go into China with maybe one or two foreign employees and one or two Chinese employees, none of whom is remotely knowledgeable about Chinese employment laws (on the local, regional or national level) and all of whom are — naturally — more focused on getting the business off the ground than on complying to the letter of the multiple sets of employment laws. And anyway, at this point they are usually a tight-knit group of founding employees who view themselves as much as founders as they do employees. But when the company grows, little changes on the China employment compliance front, mostly because nobody realizes how important it is to make the changes and because even if they did, there is nobody in-house who knows how to do it. So it gets kicked down the road until there is an expensive and embarrassing employment problem.
Our firm is then called more often by someone high up in the U.S. or the Europe or the Australia office than by someone on the ground in China. The person who calls us (might be the head of HR, the CFO or the CEO) has started to look at what is going on in China and sought answers from China and received inadequate responses and has now started to worry, rightfully so.
All of the above is my incredibly long-winded way of saying that foreign companies need to get on top of their China employment situations and stay there. Employer audits are the way to go in most situations, but in the meantime and as a supplement, it is critical that someone at your company understand China employment law basics. Someone at your company needs to know enough not to be able to solve every issue, but to spot the issues before they blow sky-high.
And we have just the book for that and I am writing about it today because it just came out in paperback (the Kindle version came out a few weeks ago).
Our lead China employment lawyer, Grace Yang recently had published The China Employment Law Guide and you really really really should buy it and put it on your shelf. And when I say put it on your shelf, I mean you should buy the softcover version (not the Kindle version) so you can literally put it on your shelf. Heck, get more than one copy and give it to everyone in your company who manages your employees or plays any role in their hiring or their firing. This is a book that is meant to be used for background and for reference and as a decision-making guide. Get it now!
Just a little bit about Grace Yang, its author. Grace grew up in Beijing and excelled at and graduated from China’s best law school there — Beijing University. She then came to the United States to attend the University of Washington law school where she again excelled and graduated. Grace is my firm’s lead China employment and labor lawyer and she is the lawyer at our firm to whom everyone else goes for China employment and labor law questions. Grace is a licensed U.S. lawyer (she is licensed in both Washington and New York) and she splits her time between Seattle and Beijing.
Anyway, did I tell you that you should buy the book? Of course I did and you should.