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Annual Leave and Sick Leave Entitlements in China: A Guide for Overseas Employers

If your company is just entering the Chinese market and starting to hire employees, you will be facing an intricate set of local employment and labor rules.  With the complex Chinese bureaucracy, it can be difficult to navigate all of the regulations on your own, without in-country expert guidance.

This brief guide to leave entitlements in China will give you an idea of the basic rules and customs that apply to both Chinese and expat employees.

Statutory Annual Leave Requirements in China

Annual leave is a paid benefit in China, and is required if an employee has worked more than one year cumulatively for all employers (not just the current employer).  For cumulative employment of 1-10 years there is five days of annual leave, and twice that amount for service of 10-20 years.

Case Example

We had a client with an employee in China who was new to the company, but had worked in China for over 10 years.  The employee thought he was entitled to 10 days of leave based on that, and we told our client that he was correct given on his previous employment history in China with other companies.

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What if my employee doesn’t take their leave?

Sometimes an employee wont take their annual leave, but there is a strong policy in China against that practice and employers are asked to ensure that leave days are taken.  If the leave is not taken or carried over to the next year, then the employer has to pay 200% of the average daily wage for each unused leave day.

Sick Leave Entitlements in China

The minimum sick leave entitlement in China is three months (for employees with less than 10 years cumulative work experience).  Sick leave is paid on a schedule that depends on the number of years of work, ranging from 60% to 100% of salary.

Shield GEO Solution

Hiring employees in China means you have to comply with all of the employment, payroll, and tax laws, and that includes understanding how leave any payments are calculated.

How can you establish compliance if you are new to the Chinese system and don’t have local resources to call upon? 

We can help by providing you with a local employer of record in China, and in country experts to guide you.  Our local partner will take care of every aspect of the documentation, on-boarding, and payroll of your employees, including calculating and monitoring leave days. 

This will give your company peace of mind that you are in full compliance with Chinese laws, including immigration and labor protections.  We make international employment simple for your company and our clients in all major business markets.

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Looking to hire an employee in China? Get in touch.

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