China Offer Letter vs. Labor Contract: What Foreign Employers Must Sign Before Day One

In the United States, Canada and much of Europe, the signed offer letter is the document that binds both sides. In China it is not. The written labor contract is the legally decisive document, and the PRC Labor Contract Law requires one to be in place no later than one month after the employee starts work. Miss that window and the employer owes double wages for each additional month, up to a point at which an open-ended contract is deemed to exist. This guide compares the two documents side by side, lists the mandatory contract terms, explains probation caps, bilingual drafting, handbook procedure and non-compete placement, and ends with a Day-One document checklist.

Table of Contents

1. Why the Offer Letter Is Not the Deciding Document in China
2. Offer Letter vs. Labor Contract at a Glance
3. The One-Month Signing Deadline and What Missing It Costs
4. What the Written Labor Contract Must Contain
5. Contract Term and Probation Limits
6. Bilingual Contracts and Which Language Controls in Practice
7. Confidentiality, IP and Non-Compete: Where Each Clause Belongs
8. Rules and Regulations and the Employee Handbook
9. Writing an Offer Letter That Does Not Collide With the Contract
10. Day-One Document Pack and Decision Checklist
11. Illustrative Scenario (Hypothetical, Not a Real Client)
12. How Knit's EOR Service Handles This
13. Frequently Asked Questions
14. Glossary of Key Terms
15. About Knit
16. Related Reading

1. Why the Offer Letter Is Not the Deciding Document in China

A typical Western hiring workflow runs like this. The hiring manager extends a verbal offer, HR sends an offer letter, the candidate signs it, and that signature is the moment both sides treat the deal as done. The letter states title, salary, start date and a handful of conditions. Anything more detailed follows in an employment agreement or a handbook acknowledgment, and in some jurisdictions nothing more follows at all.

China works differently. The PRC Labor Contract Law begins from a simple rule: to establish a labor relationship, a written labor contract shall be concluded (Article 10). The statute then builds an entire enforcement structure around that document. It prescribes mandatory contents, caps probation by contract length, controls how fixed-term contracts convert to open-ended ones, and attaches financial penalties when the written contract is late or missing. You can read the English text of those provisions on the Supreme People's Court's English site, which reprints the Labor Contract Law. That page is a 2015 reprint, so confirm the current consolidated text with local counsel before you rely on any article number in a live matter.

An offer letter can still do useful work. It records what was promised during recruitment, sets expectations, and gives the candidate time to resign from a current job. But it is a preliminary document. The Shanghai municipal government's international service portal puts the point plainly in its FAQ on signing a labor contract in China: a letter of appointment does not qualify as a labor contract, because it is a one-sided offer that the employee has not accepted. That portal also summarizes the one-month rule and the double-wage consequence discussed below.

Three practical consequences follow for a foreign employer:

• A signed US-style offer letter does not stop the compliance clock. The one-month period in Article 10 runs from the date employment begins, whether or not an offer letter exists.
• Terms in the offer letter and the contract must match. If the two documents conflict, you have created a dispute before the first paycheck.
• Common Western terms may not survive. At-will language, broad penalty clauses and open-ended probation provisions can be void or partly void under the statute, as later sections explain.

If your company has no Chinese entity, a second question sits underneath the first: who is the employer that signs the contract? A foreign company without a local entity generally cannot be the contracting employer on a standard PRC labor contract. Knit's guide to hiring in China and why companies use an EOR covers that structural issue, and the rest of this article assumes a Chinese legal employer exists, whether it is your own entity or an EOR.

2. Offer Letter vs. Labor Contract at a Glance

The table below compares the two documents on the dimensions that matter most to a foreign HR team. The legal-effect and mandatory-terms rows rest on the Labor Contract Law as cited in the sections that follow. The language and practice rows reflect common market practice, so confirm them with local counsel for your city.

The right-hand column is where regulators, arbitration committees and courts look first when a dispute arises. Treat the offer letter as a recruiting document and the labor contract as the employment document.

3. The One-Month Signing Deadline and What Missing It Costs

The central deadline sits in Article 10 of the Labor Contract Law. If the parties have not signed a written contract when employment begins, they must conclude one within one month from the date the employer starts using the worker's labor. If they sign before work starts, the labor relationship is established on the actual start date. In short: sign before Day One, and treat day 30 as a hard stop rather than a target.

The cost of missing the deadline comes from two sources, and both are verifiable in official text.

Article 82 of the Labor Contract Law. Where an employer fails to conclude a written labor contract for more than one month but less than one year from the date it starts employing the worker, it must pay the worker two times his salary for each month. The English reprint of Articles 80 to 88 shows the wording, along with related penalties for unlawful probation clauses (Article 83), holding employee documents or collecting deposits (Article 84), and failing to deliver a copy of the signed contract to the worker (Article 81).

Articles 5 to 7 of the Implementing Regulations. The State Council's Regulations on the Implementation of the Labor Contract Law (State Council Order No. 535, promulgated September 18, 2008) fill in the mechanics. The Chinese-language text is published on the State Council's official website. The relevant provisions work as follows:

• The doubled-wage period starts on the day after the first month of employment ends and stops on the day before the written contract is finally signed (Article 6).
• If the employer has gone more than one month but less than one year without a signed contract and the employee refuses to sign, the employer must give written notice terminating the relationship and pay statutory severance under Article 47 of the Labor Contract Law (Article 6).
• If the employee refuses to sign within the first month after receiving written notice from the employer, the employer must give written notice ending the relationship. No severance is owed, but the employer must still pay remuneration for the time actually worked (Article 5).
• If a full year passes without a written contract, doubled wages run from the day after month one through the day before the one-year anniversary, and an open-ended contract is deemed to have been concluded on the one-year date. The employer must immediately sign a written contract (Article 7). The Labor Contract Law echoes the deemed-open-ended rule in Article 14.

The timeline in table form:

Two cautions apply. First, how the doubled amount is calculated in practice (for instance, whether it is treated as one extra month of wages on top of wages already paid) is a point of local practice, so confirm the method with counsel in the city where the employee works. Second, the Regulations as cited above come from the 2008 promulgation. Check whether any later amendment or local rule changes the details before you act.

For a broader view of how late paperwork interacts with other compliance risks, Knit's 2026 guide to direct contracting and remote hiring compliance in China explains why hiring a China-based worker without a local employer entity creates several problems at once, of which the missing contract is only one.

4. What the Written Labor Contract Must Contain

Article 17 of the Labor Contract Law lists the terms a labor contract must include. In the English reprint of Articles 17 to 24, the list reads as nine items. Article 81 adds a penalty for contract templates that fail to state the required terms clearly, so an incomplete template is itself a compliance defect and not just a drafting gap.

Article 17 also allows the parties to add optional terms, and names probation, training, confidentiality, and supplementary insurance and welfare benefits as examples. That is the legal basis for most of the "extra" clauses foreign employers want to include.

On pay, define the base salary, allowances and bonuses carefully, because the same compensation can be treated differently for labor-law purposes and for social insurance contribution purposes. Knit's explainer on what counts as wages for social insurance in China walks through that distinction. Keep the definitions consistent across the contract, payslip and social insurance filings.

Article 16 adds two procedural points. The contract takes effect when both parties sign or seal it, and each party holds one copy. Article 81 penalizes an employer who fails to deliver a copy to the worker, so record the date the employee receives theirs.

5. Contract Term and Probation Limits

Fixed-term, open-ended and task-based contracts

Article 12 of the Labor Contract Law recognizes three contract types: fixed-term, open-ended, and contracts that end when a specific job is completed. Fixed-term contracts have an agreed end date. Open-ended contracts have no fixed end date. Article 14 requires an open-ended contract in certain circumstances when the worker proposes or agrees to renew or conclude one, including when the worker has served the employer for 10 or more consecutive years, and when a worker who has already concluded two consecutive fixed-term contracts wishes to renew, subject to exceptions for workers who fall under Article 39 or Article 40(1) or (2). Article 14 also contains the one-year deemed open-ended rule discussed in Section 3.

This article keeps the topic short on purpose. Contract type drives termination risk, renewal strategy and severance cost, and it deserves a dedicated treatment, so it is better handled in a separate, deeper article on fixed-term versus open-ended contracts. For the Day-One document pack, the decision is limited: choose the type deliberately, state it in the contract, and avoid leaving the term field blank.

Severance links to contract type indirectly. Article 47 sets compensation at one month of salary for each full year of service, counts service of six months to under one year as one year, and counts shorter service as half a month, with a cap for high earners tied to three times the regional average monthly wage and a 12-year limit on the years counted. Knowing that formula before you sign a long fixed term is part of responsible planning, though termination is outside this article's scope.

Probation limits

Probation is an optional term, but if you include it, Article 19 caps the length by contract term:

The same article adds three rules. Only one probation period may be agreed between the same employer and worker. The probation period counts toward the contract term. And if a contract provides only for a probation period, that period does not stand, and the stated term becomes the contract term. If your contract is exactly one year long, confirm the boundary reading with counsel, since English translations phrase the band edges differently.

Article 20 sets a floor for probation pay. In the English text, the wage during probation cannot fall below the lowest grade for the same job at the employer or 80 percent of the agreed contract wage, and it also cannot fall below the local minimum wage. Which floor applies when the two differ is a drafting question to settle with counsel.

Article 21 limits termination during probation to the grounds in Article 39 and Article 40(1) and (2), and requires the employer to explain its reasons to the worker. Article 39 includes the ground that the worker is shown not to meet the hiring conditions during probation, which is why a clear, written, job-specific description of hiring conditions belongs in the Day-One pack. Article 37 lets the worker resign on three days' notice during probation, and 30 days' written notice otherwise.

The penalty for getting probation wrong is spelled out in Article 83. An unlawful probation clause draws an order to correct it from the labor authority, and if the employer has already applied it, the employer pays compensation measured at the worker's monthly wage for the period worked beyond the lawful limit.

6. Bilingual Contracts and Which Language Controls in Practice

Foreign employers want to read what they sign. Employees who are Chinese nationals, and local authorities, work in Chinese. A bilingual contract serves both needs, and it is common practice for foreign-invested employers and for foreign nationals working in China.

Government bodies are comfortable with this format. In November 2023, the Beijing Municipal Human Resources and Social Security Bureau released a demonstration labor contract for foreign personnel in Beijing, in Chinese and English versions. The announcement cites the Labor Contract Law and the Rules for the Administration of Employment of Foreigners in China as its basis and offers the template as a reference for employers and foreign personnel. It does not say that using the template is mandatory, and it does not say which language version prevails if the two differ. Do not read more into it than that.

Because no official page we reviewed settles precedence, treat the governing-language question as a drafting and risk decision, and consider these points:

• Put a precedence clause in the contract. State which language version controls if the versions conflict. Without one, you invite a dispute about meaning.
• Expect the Chinese version to carry weight in practice. Labor authorities, arbitration committees and courts in mainland China generally work in Chinese, so a Chinese text is the version most likely to be read in a dispute. Many employers therefore select Chinese as the controlling language and ensure the English version is an accurate translation. Confirm this approach with local counsel for the city where the employee works.
• Translate the substance, not just the words. A literal translation of a US employment agreement may import concepts (at-will employment, broad at-will termination rights, liquidated penalties) that the statute does not support. Draft for PRC law first, then translate.
• Keep both versions identical in terms of numbers and dates. Salary, term, probation length and notice periods should match exactly, and each employee should sign both versions.
• Give the employee a copy they can read. If the employee does not read Chinese, a signed English copy supports the argument that the employee understood the terms. If the employee reads only Chinese, the reverse applies.

Language also affects everyday HR. Policies, warning letters and termination notices are only as useful as the employee's ability to understand them. Knit's article on bilingual HR support in an EOR arrangement for China explains why contracts, handbooks and daily support need to work in both languages.

7. Confidentiality, IP and Non-Compete: Where Each Clause Belongs

Foreign employers often put every protective clause into the offer letter. In China, these clauses belong in the written labor contract or in a separate written agreement signed by the employee, and each has its own limits.

Confidentiality and IP-related secrecy. Article 23 allows the employer and worker to agree on keeping the employer's business secrets and intellectual property related confidential matters. Article 17 names confidentiality as an optional contract term. A confidentiality clause therefore fits naturally in the labor contract or in an annex signed with it. The Labor Contract Law does not decide who owns a given invention or copyrighted work, so ownership and assignment language should be drafted with Chinese IP counsel and not copied from a US invention-assignment form.

Non-competition. Article 23 allows a non-compete only for workers bound by confidentiality duties. Article 24 limits the group further to senior managers, senior technicians and other personnel with confidentiality obligations, allows the parties to agree scope, geography and duration within the law, and caps the restriction at two years from the end of the labor contract. Article 23 also requires monthly financial compensation to the former employee during the restriction period, and allows an agreed penalty if the worker breaches. A non-compete with no compensation term is a weak clause. Knit's guide to hiring employees in China before a local company exists discusses non-compete enforceability at a higher level.

Penalty clauses generally. Article 25 prohibits agreements on penalties for breach of contract by the worker, except the two cases in Articles 22 and 23. Article 22 permits a service-period agreement where the employer funds specialized training, with a penalty for early departure that may not exceed the training cost and must be proportionate to the unserved period. The State Council's Implementing Regulations (Article 16) define those training costs as documented training fees, travel costs during training, and other direct costs incurred for that worker. A US-style "forfeit your signing bonus" clause or a flat fee for resigning may fail these tests.

Invalid terms. Under Article 26, a contract or clause is invalid in whole or in part if the employer disclaims its statutory responsibilities or denies workers' rights, or if it conflicts with mandatory laws or regulations, among other grounds. Invalid clauses do not simply disappear from the file. They can make the rest of your contract harder to defend.

A workable structure for most employers is a short labor contract that contains every Article 17 term, plus separate signed annexes: a confidentiality and IP agreement, a non-compete agreement (for qualifying roles only, with the compensation term spelled out), and an acknowledgment of the employee handbook. Keep each annex short and specific.

8. Rules and Regulations and the Employee Handbook

Foreign companies are used to handbooks. In China, the handbook has a legal procedure attached. Article 4 of the Labor Contract Law requires employers to establish and improve their internal rules. When an employer formulates or modifies rules, or decides important matters that directly affect workers' immediate interests, the article lists examples including pay, working hours, rest and vacation, occupational safety and health, insurance and welfare, training, labor discipline and labor quota control. The process has two steps:

1. The employer first discusses the plan and proposals at a staff congress or with all employees.
2. The employer then decides after consulting the trade union or employee representatives on an equal footing.

The employer must also make the adopted rules public or notify workers of them. If the union or workers think a rule is inappropriate during implementation, they can raise it, and the rule can be modified through consultation. You can read the provision in the English reprint of Articles 1 to 6.

Why does this matter on Day One? Because rules that a company wants to enforce, such as discipline provisions, attendance policy and expense rules, generally need a documented adoption process and proof the employee received them. The English text we reviewed does not state what happens to a rule that skipped consultation, and local practice varies. The cautious approach is to run the process, keep minutes, and keep signed receipts. Article 80 also adds exposure on the other side: if internal rules that directly affect employees' immediate interests violate the law, the labor authority orders correction and a warning, and the employer compensates any worker who suffers harm.

A practical Day-One sequence for a handbook:

• Prepare a Chinese-language handbook (with an English version for headquarters) that follows PRC rules on hours, leave, discipline and pay.
• Document the consultation and publication steps required by Article 4 before the handbook takes effect.
• Give each new employee the handbook, let them read it, and collect a signed acknowledgment of receipt.
• Do not import a global code of conduct as-is. Discipline and termination provisions must fit the statutory grounds in Articles 36 to 41, which limit when an employer may end the relationship.

9. Writing an Offer Letter That Does Not Collide With the Contract

You do not have to abandon offer letters. You do have to write them so they support the labor contract and not compete with it. Several habits help.

Label it correctly. State that the letter is a summary of proposed terms, that employment is subject to signing the Chinese-law labor contract with the Chinese legal employer, and that the contract's terms control if they differ. That wording keeps expectations straight, and it reflects what the Shanghai portal says about a letter of appointment.

Name the right employer. If an EOR or local entity will be the legal employer, say so. A letter issued by a foreign parent that suggests it is the employer invites confusion about who owes wages, social insurance and severance.

Disclose truthfully. Article 8 requires the employer to inform the worker truthfully of job content, working conditions, workplace, occupational hazards, safety conditions, pay and other information the worker asks about. Vague or inflated statements in a letter can become evidence later.

Match the numbers. Salary, bonus targets, probation length, contract term, working hours and leave in the letter should equal those in the contract. If a bonus is discretionary, say so in both documents.

Respect statutory limits. Do not promise a probation longer than Article 19 allows. Do not write at-will termination rights into the letter. Do not state penalties for resignation outside the Article 22 and Article 23 situations.

Handle conditions carefully. Background checks, reference checks and proof of work authorization are common conditions. For foreign nationals, the legal right to work depends on China's employment permit system. The State Council's English reference copy of the Rules for the Administration of Employment of Foreigners in China says foreigners may work only after obtaining the required employment permit, and it notes that it is provided for reference only, with the Chinese text controlling. Permit procedures have been updated over time, so confirm the current process and how permit validity interacts with the contract term before you set the start date.

Do not collect deposits or hold originals. Article 9 bars employers from detaining a worker's resident identity card or other certificates, requiring a guarantee, or collecting money or property under another name. Article 84 provides for a fine of RMB 500 to 2,000 per person for collecting guarantee money or property, plus return of what was taken.

10. Day-One Document Pack and Decision Checklist

Use this pack as a working checklist. Sign what can be signed before Day One, and track the rest with dates. The statutory references explain why each item is on the list.

A short decision checklist helps before the pack goes out:

1. Who is the legal employer? If you have no Chinese entity, decide whether you will establish one or use an EOR. The contract must name the actual employer.
2. What contract type and term? Choose fixed-term, open-ended or task-based, and state it.
3. Is probation within the cap? Match the length to Article 19, and set pay at or above the Article 20 floor.
4. Which language controls? Write the precedence clause and make both versions match.
5. Which protective clauses apply? Confidentiality for all, non-compete only for qualifying roles with compensation.
6. Is the handbook adopted properly? Complete the Article 4 steps and keep records.
7. Who tracks the one-month deadline? Assign an owner and a calendar date for every new hire, including the date the employee received a signed copy.

If more than two answers are "we are not sure", the cheaper fix is usually to get local review before the offer goes out and not after the deadline passes. For a broader orientation to setting up a China hire from scratch, Knit's complete China EOR guide for 2026 explains the end-to-end process.

11. Illustrative Scenario (Hypothetical, Not a Real Client)

This scenario is invented for teaching. It does not describe a real client, employee or dispute. The figures are assumptions chosen to show how the rules interact.

The facts. Company X is a software company headquartered outside China. It hires Employee A, a software engineer based in Shenzhen, to start on January 5. Company X has no Chinese entity and no EOR. Its US recruiter sends an English offer letter on the company's standard template: at-will employment, a three-month probation period, a stated salary of RMB 30,000 per month (assumed), and a clause requiring Employee A to repay the first month's salary if she resigns within a year. Employee A signs the letter and starts on January 5. Company X pays her through a contractor arrangement and never issues a labor contract.

What goes wrong.

• No written labor contract. Under Article 10, a written labor contract was due within one month of the start of employment. February 5 passes with nothing signed.
• The offer letter is not a substitute. It was not issued by a Chinese legal employer and it does not contain the Article 17 terms. The Shanghai portal's guidance that a letter of appointment does not qualify as a labor contract applies.
• The probation term is unlawful. Suppose the eventual contract is a two-year fixed term. Article 19 caps probation at two months for that term, so the three-month figure exceeds the limit. If it were applied, Article 83 would require compensation for the period beyond the legal limit.
• The repayment clause is a penalty. Article 25 prohibits penalty agreements outside the training and non-compete cases in Articles 22 and 23. A flat repayment of salary on resignation does not fit either exception.
• At-will language conflicts with the statute. Articles 36 to 41 set the grounds on which an employer may end the relationship, and Article 87 requires compensation of twice the Article 47 rate for unlawful termination. A promise of at-will termination is not something Chinese law will enforce.

The cost of the delay (simple assumptions). Suppose Company X finally engages a legal employer and signs a compliant contract on May 5, four months after the start date. Month one (January 5 to February 4) was within the legal window. Months two, three and four, from February 5 to May 4, fall in the doubled-wage period under Article 82 and Article 6 of the Implementing Regulations. On the assumption that the penalty equals one additional month's wage for each of those three months, the extra exposure is 3 x RMB 30,000 = RMB 90,000, before any arguments about calculation method, social insurance back-payments, or dispute costs. Whether a given arbitrator would calculate it exactly this way is a question for local counsel.

How it could have gone. If Company X had used an EOR or its own entity as the legal employer, the compliant sequence would have been:

1. Offer letter conditional on signing a PRC-law labor contract with the named Chinese employer.
2. Bilingual labor contract with a language-precedence clause, a probation period of up to two months, and all Article 17 terms, signed before January 5.
3. Separate signed confidentiality annex, plus a non-compete only if the role qualifies and the monthly compensation is stated.
4. Handbook adopted through the Article 4 steps and acknowledged by Employee A on Day One.
5. Signed copy delivered to Employee A and recorded.

The compliant path takes more preparation than a one-page offer letter. It also removes the exposure above.

12. How Knit's EOR Service Handles This

Knit's China operations hub is in Shenzhen. In an Employer of Record arrangement, the EOR acts as the legal employer on the labor contract, which is the structure that lets a foreign company without a Chinese entity hire a person in China within the rules. Several of the items in this article therefore sit with the legal employer and not with your headquarters:

• The contract itself. The written labor contract is issued by the legal employer and has to carry the Article 17 terms, so your offer terms should be shared with the EOR early enough to be reflected in it.
• Payroll and social insurance. These run through the legal employer, based on the pay and term stated in the contract.
• Handbook and rules. Internal rules take effect through the legal employer's own adoption process, which is separate from your global code of conduct.
• Language support. Contracts, policies and day-to-day questions often need to work in both Chinese and English.

The scope, timing and responsibilities for any specific engagement are set out in the service agreement, so confirm them with Knit's team before you rely on them. Your company continues to direct the employee's work. The EOR is not a substitute for your management of the role, and it does not guarantee any legal outcome. For a plain-language overview of the model, see Knit's explainer on what an Employer of Record is, and for the reasoning behind using one before a company has an entity, see why companies use an EOR before setting up a legal entity in China. Details of Knit's service are on the Employer of Record services page.

13. Frequently Asked Questions

Is a signed offer letter a binding employment contract in China?

‍No, not in the sense that matters for compliance. A letter of appointment is a one-sided offer that the employee has not accepted, according to the Shanghai municipal government's international service portal, and it does not replace the written labor contract. The Labor Contract Law requires a written labor contract to establish the labor relationship (Article 10). Use the offer letter as a recruiting record and sign the contract as the employment document.

How long do we have to sign a written labor contract after the start date?

‍The Labor Contract Law (Article 10) gives one month from the date employment begins when no contract was signed in advance. If the contract is signed before work starts, the labor relationship begins on the actual start date. Treat the first day as your internal deadline and the 30-day mark as the absolute limit, and keep proof of when each employee received a signed copy.

What is the penalty for missing the one-month deadline?

‍Article 82 of the Labor Contract Law requires the employer to pay two times the worker's salary for each month when a written contract is missing for more than one month but less than one year. The Implementing Regulations (Article 6) start the doubled period the day after month one ends and stop it the day before the contract is signed. How the amount is computed in practice should be confirmed with local counsel.

What happens if a full year passes without a written contract?

‍Under the Labor Contract Law (Article 14) and the Implementing Regulations (Article 7), an open-ended labor contract is deemed concluded on the one-year date, and the employer must immediately sign a written contract. Doubled wages apply for the period from the day after month one through the day before the one-year anniversary. An open-ended contract is harder to end, so the cost extends beyond the wage penalty.

What if the employee refuses to sign the contract?

‍Do not ignore it. Under Article 5 of the Implementing Regulations, if the employee still refuses to sign within the first month after the employer's written notice, the employer must give written notice ending the relationship and owes pay for work actually done but no severance. After more than one month, Article 6 requires written notice of termination and Article 47 compensation. Document every request in writing and consult counsel.

Must the labor contract be in Chinese?

‍We did not find an official English-language provision that sets a language requirement for the contract itself. In practice, authorities and arbitrators in mainland China work in Chinese, and many employers make the Chinese text controlling and add an English version for the foreign employee and headquarters. Beijing's 2023 sample contract for foreign personnel was published in both languages. Confirm the approach with local counsel.

Can we put a non-compete clause in the offer letter?

‍It is better placed in the signed labor contract or a separate signed agreement. Under Articles 23 and 24, a non-compete applies only to senior managers, senior technicians and others bound by confidentiality, must provide monthly financial compensation during the restriction, and cannot run longer than two years after the contract ends. An offer letter clause with no compensation and no role limit is weak.

How long can the probation period be?

‍Article 19 sets caps by contract term: one month for a term of three months to under one year, two months for one year to under three years, and six months for three years or more or open-ended contracts. No probation is allowed under three months or for task-based contracts, and only one probation period may be agreed. Unlawful probation draws compensation under Article 83.

Do we need a Chinese employee handbook?

‍There is no single statutory handbook form in the sources we reviewed, but Article 4 requires employers to adopt internal rules on matters affecting employees' immediate interests through a consultation process with the staff congress or all employees and the union or employee representatives, and then to publicize them. Employers commonly satisfy this with a Chinese-language handbook, documented consultation and signed employee acknowledgments.

Can a foreign company with no Chinese entity sign the labor contract itself?

‍A standard PRC labor contract requires a Chinese legal employer, so a foreign company with no local entity generally uses an Employer of Record or sets up an entity first. Hiring through an informal contractor or consultant arrangement for what is really an employment relationship carries compliance risk, because the Labor Contract Law looks at the substance of the relationship. Review the structure with local counsel before the start date.

14. Glossary of Key Terms

Labor Contract Law (LCL): The PRC statute adopted in 2007 that governs how employers and workers form, perform, change and end labor contracts in mainland China.

Implementing Regulations: State Council Order No. 535, issued in 2008, which clarifies how the Labor Contract Law applies, including the rules for late or missing written contracts.

Written labor contract: The signed document, concluded by the employer and the worker, that contains the mandatory terms in Article 17 and establishes the labor relationship on paper.

Offer letter: A recruiting document that sets out proposed terms. It is not a substitute for the labor contract in China.

Double wages (Article 82): The statutory payment of two times the worker's salary for each month a written contract is overdue, within the period described in the Labor Contract Law and its Implementing Regulations.

Open-ended labor contract: A contract with no fixed end date. It can be required after 10 years of consecutive service, after two consecutive fixed-term contracts in the circumstances Article 14 describes, or by deemed conclusion when no written contract is signed within one year.

Probation period: An optional trial period inside the contract term, capped by Article 19 according to the length of the contract.

Non-competition clause: A post-employment restriction that applies only to qualifying personnel, must be paired with monthly compensation, and cannot exceed two years (Articles 23 and 24).

Rules and regulations (employee handbook): Internal rules that, for matters touching employees' immediate interests, must go through the consultation and publication process in Article 4.

Employer of Record (EOR): A local legal employer that hires and pays staff on behalf of a client company, which directs the day-to-day work.

15. About Knit

Knit People (万领钧) is a global employment services provider founded in Canada in 2015, with about 11 years of experience, more than 4,000 clients, coverage in 172 countries and regions, over USD 600 million in annual payroll processed, 60+ owned entities, and a China operations hub in Shenzhen. Its services include Employer of Record, PEO, Global Payroll and Contractor of Record, alongside headhunting and recruitment, background checks, entity registration, global tax, insurance and work visa support. Knit holds MSB license No. M23187879. To discuss a China hire, contact the Knit team or read about the Employer of Record services.

16. Related Reading

• Hiring in China: what to know and why use an EOR
• The complete China EOR guide for 2026
• Employer of Record China: ensuring bilingual HR support for your team
• China EOR guide: what counts as wages for social insurance

This article provides general educational information about employment documentation under the laws of mainland China as of October 2026. It is not legal, tax or immigration advice. Statutes, implementing regulations and local rules, including probation limits, penalty provisions and permit procedures, change over time and can differ by province and city, and article references here come from a 2015 English reprint and the 2008 Implementing Regulations. Before you sign any contract, adopt a handbook or hire in China, confirm the current requirements with Knit's local team or licensed PRC employment counsel and qualified tax advisors.