Bogged Down by China's Hr Administrations? Help is on Its Way!

| Posted: 30-05-2008 | Comments: 0 | Views: 4 | Rating: (58)

(?)

HR Outsourcing is a fast developing trend in China, as complex labor regulations and tedious HR procedures baffle the increasing number of foreign investors lured to this booming economy. Many foreign companies have turned to HR outsourcing providers such as The JLJ Group as a solution to minimize legal risks, keep a focus on their core business activities as well as lower costs by avoiding the need to hire and manage an in-house HR team.

The range of HR outsourcing services available in China is tailored to match its unique set of labor regulations, policies and practices. Unlike other countries, China mandates employers' obligations to file their staff employment and dismissal with relevant government bureaus, maintain employees' personnel file (a Chinese document that records employment and academic history of an employee), withhold and pay social benefits as well as individual income tax on behalf of their employees, etc. In particular, China refrains Representative Offices from directly hiring local employees and requires them to do so through an authorized service provider instead. Some commonly outsourced HR functions in China include:

Employment Contract Management
All companies are required to sign employment contracts with their employees and severe penalties apply otherwise. The China labor law has several provisions relevant to the basic contract terms. For example, probation period must not exceed two months, minimum wage of RMB 960 (for Shanghai) must be met, severance pay must be provided in most contract termination scenarios, etc. It is useful to seek assistance from the HR professionals when crafting the contract so as to avoid violating the regulations unknowingly.

Generally, it is important to prepare the contract in Chinese (since China's legal system only acknowledges contracts in Chinese) and include standard terms such as probation period and length of contract, job description and title, working conditions and labor protection, salary, termination conditions, disciplinary rules and breach of contract provisions, non-disclosure and non-compete agreements, etc.

Social Benefits Administrations

This is an important aspect in China's HR administrations apart from basic payroll that applies only to local Chinese employees. It is mandatory that both employers and employees contribute to social benefits on a monthly basis. It is the employer's (or the HR service provider's) responsibility to compute, withhold and pay the contributions (including employee's portion) to the respective government bureaus. The contribution basis and percentages differs from region to region in China.

Increasingly common, supplemental benefits are voluntarily provided by employers as part of their retention strategy. It is important to ensure your HR provider offers a good range of such additional insurance schemes that fits your organization's needs.

Individual Income Tax Administrations
Similar to social benefits administrations, employers are required to withhold and submit income taxes on a monthly basis, on behalf of their employees. China's tax calculation is based on a progressive tax rate ranging from 5% to 45% and allows tax deductions for social benefits contribution and a basic tax threshold of RMB 2,000 (recently increased from RMB 1,600). The role of a professional HR provider is to help employers keep up-to-date with the constantly evolving tax rules and assist with the administrations and compliance of their employees' tax contributions.

Employment termination and dismissal
It is generally difficult to terminate employment contracts in China, unless the employee violated some company regulations or failed certain conditions of employment. In most situations, employers are required to provide severance compensation, which is generally equal to one month's pay per year of service, and must have a clearly defined reason for terminating their employee. Many foreign companies chose to seek assistance from HR professionals to manage this complex employment and dismissal process, so as to minimize legal and financial liabilities.

A HR service provider in China will also assist with the maintenance of the employees' personnel file and all related certifications during the employment period. The document, which records all academic and employment history of an employee, is transferred from one employee to another when the employee changes jobs.

Unlike in other countries like Europe and North America, where HR Outsourcing a fairly familiar concept, this industry is only beginning to grow in China. It is critical to find a qualified firm which can provide professional services to satisfaction. In particular, companies should ensure that the HR outsourcing firm they chose:

• Provides on-time and accurate service delivery
• Possesses in-depth knowledge of relevant laws and policies
• Ensures security and confidentiality of the company's data
• Adapts to clients' need
• Possesses adequate technology to support clients' need.

This article is contributed by The JLJ Group (www.jljgroup.com) – a one stop service-provider for foreign enterprises entering and growing in China. For more information, please email to info@jljgroup.com or visit www.jljgroup.com/page/en/73/HR-Outsourcing.html.

Rate this Article:

Current: 0 / 5 stars - 0 vote(s).

Article Tags: Human Resource, China, Hr Outsourcing In China, Payroll Processing, Benefits And Compensation, Social Insurance

Article Source: http://www.articlesbase.com/human-resources-articles/bogged-down-by-chinas-hr-administrations-help-is-on-its-way-432282.html

Print article

Send to friend

Publish this Article

Author feedback

About the Author:

The JLJ Group (www.jljgroup.com) is a one-stop service-provider assisting foreign companies entering and growing in China.

Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Add new Comment

Hedge Against Job Loss By Starting Your Own Internet Business
By: Joel Teo | 10/09/2005 | Business
Lose their household income when that happens. This article gives you three reasons why you should hedge your income against job loss by starting your own internet business. Make.

Search in the Far East
By: Joseph Pratt | 05/05/2006 | Internet
One great aspect of search is that as it evolves, advertisers grow increasingly aware of its effectiveness. So enticing is China's advertising landscape for the accommodating platform of search, that Yahoo and, as of last January, Google, have launched Chinese versions of their popular search engines themselves.

Importing Costs from China to New Zealand and Australia
By: Simon Slade | 23/06/2006 | Online Business
I've noticed a few posts on the SaleHoo forum recently about the high costs of importing wholesale goods from China to NZ and Australia.

Investing In China: Tax Incentives
By: David Carnes | 13/10/2006 | Affiliate Programs
The People's Republic of China offers a variety of tax breaks and financial incentives to encourage inbound investment.

China in London
By: Jane Merrow | 22/11/2006 | Careers
China is still a Communist country, there is a feeing of optimism about China becoming part of the Global integration. They are providing us with all sorts of new opportunities and ideas and employment. Whole departments of famous British automotive and engineering companies have happily moved to China to share their knowledge and expertise.

Australian Automotive Industry Right for Chinese Oem's
By: Robert Lane | 11/01/2007 | Business Opportunities
This article outlines the issues currently faced in the Australian automotive market and why the time is right for Chinese OEM's to enter the Australian market.

Chinese for Nannies
By: Jane Merrow | 18/04/2007 | Careers
China is likely to be a world economic leader for the foreseeable future, so young people in the UK are learning Chinese through their nannies.

Human Organ Trade Banned - China
By: Chris Chew | 02/06/2007 | Medicine
In May 2, 2007, China officially banned the trade in human organs, China's state media reported. The Asian giant is often accused of heavily involving in the harvesting human organs of executed prisoners for organ transplant surgeries. Is harvesting human organs for transplant in this way ethical? After all, lives...

Got a Question? Ask.

Ask the community a question about this article:

Frequently Asked Questions

Mikasa Bonnie 5290 China
By: Doug | 16-08-2008
Can anyone tell me anthing about this pattern, when made? anything relevent

What do you love and hate about the Beijing Olympics?
By: AimeeRed | 15-08-2008
What is your favorite olympic sport? How do you think the Beijing Olympics have been going so far? My personal favorite is woman's artistic gymnastics. I'm excited that Nastia Liukin won gold and Shawn Johnson Silver in the all-around final.

Chinese girl not pretty enough?
By: luvfood3 | 14-08-2008
I heard this little girl named Yang Peiyi sang in the Olympics, but the Chinese committee thought she wasn't pretty enough so another little girl stood in for her. Was this right?

Grenade attack kills 16 in China
By: RomanEmpire | 04-08-2008
Does anyone know who threw the granade and why? Will this have any effect on the Olympics due to open next week?

How long does it take to get a fiance` visa issued at the Consulate in Guangzhou,China
By: Dee222 | 03-08-2008
how long does it take to get a fiance` visa issued at the Consulate in Gaungzhou, China

Value of Royal Rose China
By: marthaintn | 23-07-2008
An aged lady gave me a set of "Royal Rose Fine China - Japan" in 1974. Has it any value? Thank you.

Q&A Powered by:

Latest Human Resources Articles

The Many Different Types of Storage Boxes
By: Doug Nourse | 04/09/2008
When you actually look, you can see that storage boxes come in a huge range of sizes from tiny to massive. Also, they are used in almost every setting. They are used in schools, offices, libraries, shops, supermarkets and even on cargo ships. Storage boxes are a great way of storing things cheaply and easily. People in the office and at home seem to prefer storage boxes over any other kind of storage system.

You Can Find a Person Through People Directory Online
By: lhenzie U. dayap | 04/09/2008
In order for you to locate and identify a person, you can conduct free people search online. People search online can provide you with an access to the information about a person or people from USA. Actually, search services can aid you in locating person or people and gain lots of information about them; they offer different services such as phone number lookup, email search and address search. You can obtain the address and telephone number of people with it.

Getting in Touch With People Through People Search
By: John Walter Adams | 03/09/2008
If you have ever tried to regain contact with a person you have lost contact with these past years, then we’re sure that you couldn’t say that it was an easy activity – that is, unless you use online people search resources.

Regain Peace of Mind by Using a Fast Online Phone Number Lookup
By: Francisella Griffin | 03/09/2008
Phone numbers that keep on appearing on your landline caller ID or your cell phone’s missed call list that are not familiar to you can be another thing that will keep you thinking all day. Sometimes, you will not have peace of mind until you discover who made that mysterious phone call. You might ask yourself—would that be a former friend, a business associate, a threat, or a call for help? Whatever it might be, you really need to know who is behind that call to regain your peace of mind.

Where to Look for Public Marriage Records
By: lhenzie U. dayap | 02/09/2008
If you want to search for marriage records without the hassles of manual labor, don't fret. Technology has made easy access to this information possible. Online registries over the Internet can give anyone access to marriage records and other documents (divorce records, court records, criminal and military records, adoption records, etc) that used to be restricted to the public.

Creatine - Every Teenager Must Need to Know?
By: Brayan Peter | 02/09/2008
Creatine is naturally found in vertebras. It is a nitrogenous organic acid. The supplements of creatine are used by athletes and other body builders to improve their energy levels. The nerve cells are also benefited.

How to Locate Broward County Public Records
By: Antonius Brigpenship | 01/09/2008
Tracing Broward County public records has never been easier. Whereas before you always had to go down to the county courthouse and sift through mountains of paperwork. Now all it takes is a few strokes on your computer.

Investigate Prank Callers by Using Online Phone Number Lookup
By: Francisella Griffin | 01/09/2008
Almost everyone who has a phone number experienced the scenario when their phone rings and then after answering it, no one answers on the other line. It can become more annoying when after a few minutes, that same call happens again and again throughout the day. Prank calls will never stop until you catch who is behind the abusive phone calls. It can be very frustrating receiving calls from someone you have no idea who.

More from The JLJ Group

Connecting the Dragon - Opportunities and Challenges in China's Telecom Industry
By: The JLJ Group | 12/06/2008 | Business Opportunities
With a population of 1.3 billion, China owns the world's largest fixedline and mobile network in terms of both network capacity and number of subscribers.

Franchising - the Way to Go in China
By: The JLJ Group | 12/06/2008 | Corporate
Franchising, despite being almost unheard of in the early 90's, spread like wildfire in the recent years. The JLJ Group shares some findings of their recent market research on China's Franchising Industry.

Article Categories

Article Marketing

Article Notepad

Stop Duplicate Content

Term Papers

Follow ArticlesBase at http://twitter.com

Need Help?

Sign up for our email newsletter

Receive updates, enter your email below

Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (0.16, 17)

Bogged Down by China's Hr Administrations? Help is on Its Way!

Article Comments

Related Articles

Got a Question? Ask.

Latest Human Resources Articles

More from The JLJ Group

Need Help?

Site Links

Webmasters

Business Info

Sign up for our email newsletter