The 10 core points of signing an agreement on the employment of foreign personnel: from the design of the terms to the full analysis of risk prevention and control.

10 core points for signing an agreement to employ foreign personnel: from clause design to risk prevention and control

In the context of globalization, by employing expatriates, companies can gain international perspectives, language advantages and cross-cultural management skills. However, the employment agreement for foreign personnel involves multiple fields such as law, taxation, and culture. If the terms are not properly designed, it may cause risks such as labor disputes and illegal employment. This paper systematically combs the key points of signing the agreement and provides enterprises with operational guidelines that can be landed.

1. Agreement Subject and Qualification Review: Ensure "Legality" and "Adaptability"

1. Enterprise qualification verification
The enterprise must have legal business qualifications, and the employment position must meet the "domestic shortage of suitable candidates" standard. For example, a technology company's employment agreement for foreign engineers was deemed invalid by the labor department because it did not prove the special nature of the position.
2. qualification examination of foreign personnel

• professional qualification : if foreign doctors are recruited, their qualification and project experience shall be verified;
• health certificate : medical examination report within 6 months is required, eliminate the risk of infectious diseases;
• no criminal record : no criminal certification documents that need to be certified by the notary office. a foreign bank has caused reputation loss due to its failure to verify the criminal record of the candidate.
  3. visa and work permit
  the agreement should specify the responsibility of the enterprise to assist in handling z-word work visa, employment permit and residence permit. For example, a manufacturing company was forced to pay liquidated damages for failing to agree on a visa processing time limit in the agreement, resulting in foreign employees being restricted from leaving the country due to expired documents.

2. agreement duration and trial period: balancing flexibility and stability

1. Contract Term Limit
According to the regulations, the labor contract of foreign personnel shall not exceed 5 years. An enterprise signed a 6-year contract with foreign employees, which was deemed invalid by the labor department. The enterprise needs to re-sign and pay the social security difference.
2. probation period agreement

• probation period duration shall conform to local regulations: for example, the longest probation period in France is 2 months and that in Germany is 6 months (subject to adjustment according to the contract period);
• probation salary shall not be less than 80% of the official salary: a consulting company's probation salary is lower than the standard, be sentenced to reissue the difference and pay compensation;
• conditions for termination of probation period: specific circumstances of "non-compliance with employment standards" need to be clarified. for example, an enterprise is convicted of illegal dismissal of foreign employees due to its failure to define the standard of "non-compliance with performance" in the agreement.

3. job content and location: avoid the risk of "job mismatch"

1. Accurate job description
The agreement needs to specify the job name, responsibilities, skill requirements and assessment criteria. For example, an Internet company only wrote "technical post" in the agreement and did not specify the specific development direction, resulting in foreign employees refusing to participate in non-agreement projects, causing a cooperation deadlock.
2. working place and job transfer terms

• specify the initial working place, such as "Shanghai branch of China";
• agree on the conditions for job transfer: for example, "the enterprise can adjust the working place due to business needs, but it needs to notify 30 days in advance and bear the relocation expenses". A foreign company was sentenced to pay transportation and accommodation subsidies for forcing foreign employees to transfer from Beijing to Guangzhou because it did not agree on compensation for job transfer.
  3. prohibition of part-time jobs and non-competition
• foreign employees are explicitly prohibited from engaging in other paid work during the agreement period;
• for posts involving trade secrets, non-competition clauses can be agreed, but economic compensation is required. For example, a technology company failed to pay non-competition compensation to foreign R & D personnel, resulting in the terms being invalid by the court.

4. compensation and benefits: balancing market level and compliance

1. transparency of salary structure

• basic salary shall not be lower than the local minimum standard: a manufacturing enterprise was ordered to make up the difference and pay late fees because the basic salary of foreign employees was lower than the minimum wage;
• clear performance salary evaluation method: for example, "quarterly performance accounts for 20%, according to KPI completion rate";
• agreed salary payment method: for example, "RMB salary will be paid by bank transfer on the 5th of each month".
  2. social insurance and provident fund
• compulsory payment of insurance types: pension, medical care, work injury, unemployment and maternity insurance;
• agreement exemption: if national personnel who have signed a bilateral social security agreement with Germany, they can be exempted from paying some insurance types with the insurance certificate;
• provident fund payment: the current law does not force enterprises to pay for foreign employees, but Shanghai, Shenzhen and other regions allow the two sides to negotiate the payment. A consulting company for not clear with foreign employees provident fund terms, causing labor disputes.
  3. additional welfare design
• housing subsidy: such as "providing 5000 yuan housing allowance or arranging dormitory by enterprises every month";
• family visit leave: for example, "you can enjoy 15 days of paid family visit leave for each full year of work, and the enterprise shall bear round-trip air tickets";
• language training: for example, "provide employees with Chinese courses twice a week at the expense of the enterprise".

5. working hours and vacations: respecting cultural differences and legal boundaries

1. selection of working hour system

• standard working hour system: 8 hours per day, 40 hours per week;
• irregular working hour system: applicable to senior management, sales and other positions, subject to the approval of the labor administrative department;
• comprehensive working hour system: applicable to seasonal production positions, for example, a garment enterprise was sentenced to pay overtime for foreign employees because it did not apply for a comprehensive working hour system.
  2. overtime and leave rules
• overtime limit: for example, "overtime shall not exceed 3 hours per day and 36 hours per month";
• paid annual leave: accumulated according to working years, such as "5 days of annual leave after 1 year of work";
• legal holidays: it is clear whether the enterprise implements Chinese legal holidays or its national holidays according to the nationality of the employees. A foreign company was complained of "cultural discrimination" because it did not arrange foreign employees to spend Christmas ".

6. agreement dissolution and termination: clear conditions and economic compensation

1. Both parties have the right to terminate

• the conditions for the termination of the enterprise: for example, "the serious dereliction of duty of the employee causes the loss of the enterprise to exceed 100000 yuan";
• the conditions for the termination of the employee: for example, "the enterprise fails to pay the salary on time for more than 15 days";
: usually 30 days, but some countries (such as France) require 3 months.
2. economic compensation standard
• if the contract is terminated due to enterprise reasons, compensation shall be paid according to the working years: for example, "one month's salary shall be paid every full year";
• compensation for illegal termination: for example, "twice the economic compensation shall be paid for illegal termination of an enterprise";
• Compensation calculation base: including basic salary, performance salary and fixed subsidy, but excluding bonus. An enterprise was sentenced to make up the difference because it did not include the housing subsidy in the compensation base.
  3. resignation formalities
• specify the resignation handover contents: such as "returning enterprise assets, signing confidentiality agreement and completing work handover";
• agree on the responsibility of certificate cancellation: for example, "the enterprise assists in handling the cancellation procedures of employment permit and residence permit";
• non-competition: for example, "you may not join a competitor company within 2 years after leaving the company".

7. dispute resolution and legal application: reducing the risk of cross-border litigation

1. Dispute Resolution

• Negotiation: Priority is given to resolving disputes through communication between the two parties;
• Mediation: Third-party institutions (such as labor arbitration committees) may be introduced to mediate;
• Arbitration or litigation: an arbitration institution (such as the China International Economic and Trade Arbitration Commission) or a court of jurisdiction (such as the court where the enterprise is located) is expressly agreed. A foreign company did not agree on a place to resolve the dispute, resulting in the case being heard in the employee's country of nationality, increasing the cost of litigation.
  2. Law applicable clauses
• Chinese laws shall prevail: for example, "this agreement shall be governed by Chinese laws and shall be interpreted in accordance with them";
• Taking into account international practices: for positions involving international trade, please refer to the United Nations Convention on Contracts for the International Sale of Goods (CISG).
  3. validity of language version
• specify the agreement language: for example, "this agreement is written in Chinese and English, and the two texts are equally valid";
• the right of interpretation is agreed: for example, "in case of conflict between Chinese and English versions, the Chinese version shall prevail".

8. confidentiality and intellectual property: protecting core corporate assets

1. Design of confidentiality clauses

• Clarify the scope of confidential information: such as "customer list, technical proposal and financial data";
• Agreed confidentiality period: such as "within the agreement period and within 5 years after resignation";
• Compensation for breach of confidentiality obligation: such as "compensation at the higher of actual loss or $100000". A technology company was only awarded compensation of 10000 yuan after foreign employees disclosed trade secrets because it did not agree on a confidential compensation standard.
  2. ownership of intellectual property
• defines the ownership of job inventions: for example, "the technical achievements completed by employees during their work shall be owned by the enterprise";
• agree on the use of intellectual property rights: for example, "enterprises can use the business-related works created by employees after leaving their jobs free of charge".
  3. competition restriction and demilitarization period
• competition restriction scope: for example, "you are not allowed to work in a competitor enterprise within 2 years after leaving office";
• arrangement of demilitarization period: for example, "after an employee proposes to leave office, the enterprise can adjust his position to work in a non-secret department for 3 months".

9. special situations: response to force majeure and policy changes

1. Force majeure clause

• defines the force majeure event: such as "the agreement cannot be performed due to war, epidemic or natural disaster";
• The agreed handling method: such as "both parties can negotiate to postpone or terminate the agreement, and do not bear the liability for breach of contract". A foreign company was forced to continue to pay foreign employees but was unable to arrange work due to the failure to agree on the terms of handling the epidemic, resulting in significant losses. Br/>2. response to policy changes
• clarify the adjustment mechanism during policy changes: for example, "if the Chinese government adjusts the social security policy for foreigners, enterprises can adjust the payment standard accordingly";
• agreed notification obligation: for example, "enterprises shall notify employees within 30 days after the policy changes and negotiate a solution".
  3. employee health and safety
• provide labor protection: for example, "provide foreign employees with safety protection equipment and organize regular health examination";
• respond to emergencies: for example, "if employees are infected with occupational diseases during work, the enterprise shall bear the treatment expenses and compensation".

10. Agreement Signing and Entry into Force: Details Determine Compliance

1. Signing subject qualification

• Enterprises need to affix official seal or special seal for contract;
• Foreign employees need to sign in person, and attach a copy of passport and visa page. The authenticity of the agreement was questioned because an enterprise did not keep a copy of the employee's passport.
  2. effective conditions and time
• agreed effective conditions: for example, "it will take effect after both parties sign and seal it and the employee obtains a work visa";
• specify the effective time: for example, "this agreement shall take effect from x, x, 202X".
  3. Agreement changes and supplements
• agreed change procedures: for example, "both parties must agree in writing to change the agreement and sign a supplementary agreement";
• Oral changes are prohibited: for example, "changes without written confirmation are invalid". A company verbally agreed to transfer foreign employees, which subsequently caused a salary dispute.

Conclusion: Agreements are the "first line of defense" for risk prevention and control

Agreements for hiring expatriates should take into account both legal compliance and commercial flexibility. Enterprises should establish an agreement review mechanism to regularly assess the effectiveness of the terms and conditions, and adjust dynamically according to policy changes and business needs. Through the design of refined terms, enterprises can minimize the risk of employment and maximize the value of foreign talents.