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Navigating Countries, Cultures, and Expectations

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Expanding a business all across the globe is always the bigger goal of every business owner.

It is a goal that many want to achieve but most of them doubt if they can actually take the challenge. For starters, it is not easy to expand a business from one country to another as there are many factors that need to be considered before it can be done. It is no easy feat so to speak. In expanding a business to another country, it is not just about hiring locals and getting them to operate the business by completing regular tasks for your company.

It is about navigating countries, cultures and expectations too. It requires understanding of the laws and regulations that apply to each country especially in terms of the local labor laws which are necessary to protect not just your business’s best interests but also your employee’s best interests.

Each country has different laws and regulations that a start-up company or expanding businesses need to comply before they can begin hiring employees to work for them. Every country’s labor laws function in a variety of ways and it is crucial to have the right knowledge about it for every country you would choose to expand your business in.

We have listed a few countries outlining basic information about the employment and labor regulations that apply to each of them.

Employment and Labor Regulations in China

The general rule in hiring employees in China is that they can only be hired by companies that are based in China. For multinational companies, they must have their own local entity in China to be able to hire locals in China. This rule applies even if you’re just planning to hire one employee. Additionally, in accordance to Chinese labor laws it is obligatory to have written employment contracts for most of the types of employment relationship. Once the employee is onboard, the company must finalize the contract terms and deliver it to the employee after a lapse of not more than one month but less than one year. In case the employment contract is not delivered, the employee is entitled to twice her/his salary.

Before finalizing a contract for an employee, it is best to be aware of the benefits that apply to employees. According to Chinese labor laws, employees are not required to work more than 44 hours in a 5-day work-week, where employees work 8 hours a day. It is important to note the 7 public holidays that China has, namely: New Year’s Day, Chinese New Year (Spring Festival), QingMing Festival, Labor Day, Dragon Boat Festival, Mid-Autumn Festival and National Day. For these holidays, employers are required to provide paid leave to the employees.

In addition to the holiday paid leaves, employees in China only start receiving vacation leaves after a year of being employed in the company. For employees employed between one year but less than 10 years are entitled to 5 days of paid annual leave. Those who have been in the company for 10 years but less than 20 years have 10 days of annual leave while those who have at least 20 years have 15 days of annual leave. It is worth noting that most foreign employers may give 2-4 weeks of annual leave for employees with mid-level to senior executive experience/designation.

Taking the entire annual leave entitlement for each year can be required by the company or employer but for those who do not do this the employee is entitled to a 300% of the employee’s average daily pay for every unused leave. This is if the employee refuses to carry over the annual leave forward. Bonuses such as a 13th month pay or annual bonus is not required in China but it is practiced by most employers in China. For sales employees, employers usually replace the bonuses mentioned above for a commission plan.

Contracts play a big role in the employer-employee relationship in China. This is emphasized by the Chinese government and it is must to write a strong employment contract where all the terms and conditions and of the relationship of the employer and employee is spelled out in black and white. The employment contract’s mandatory clauses include but are not limited to the employee’s compensation, benefits and termination requirements.

Article by NNRoad

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