The Whole Process Guide for Enterprises to Hire Foreign Employees: Key Points of Compliance Operation and Risk Avoidance

Guide to the whole process of hiring foreign employees for enterprises: key points of compliance operation and risk avoidance

With the acceleration of globalization, hiring foreign employees has become an important way to enhance international competitiveness. However, cross-border employment involves complex legal procedures and cultural adaptation issues, and a little carelessness may lead to compliance risks. From the three dimensions of policy interpretation, process combing and cultural integration, this paper systematically analyzes the complete path for enterprises to employ foreign employees, and helps enterprises to build efficient and compliant international teams.

1. policy framework: defining qualifications and conditions for the employment of foreign employees

1. enterprise qualification examination
• industry access : according to the "Regulations on the Administration of Employment of Foreigners in China", some industries (such as education, medical care, and culture) have special requirements for the qualifications of foreign employees. For example, foreign teachers are required to have a teacher qualification certificate from their home country and a certificate of language proficiency certified by the Chinese Language Commission.
• registered capital requirements : The registered capital of an enterprise must meet a certain standard before it can employ foreign employees, and the specific amount varies from region to region. For example, Beijing requires the registered capital of enterprises to be no less than 2 million yuan, while Shanghai sets the threshold of differentiation according to the type of industry.
• tax and social security records : some cities require enterprises to provide tax payment certificates and social security payment records for nearly 12 months to assess business stability. A technology company did not update its tax records in a timely manner, resulting in the rejection of a foreign employee's work permit application.

1. qualification verification of foreign employees
• academic qualifications and working experience : notarized academic certificates and working experience certificates are required, some technical positions (such as AI engineer) require a master's degree or above or more than 5 years of relevant experience.
• No criminal record certificate : No criminal record certificate issued by the notary office of the home country shall be submitted and certified by Chinese embassies and consulates abroad. A company found that it had a history of commercial fraud after hiring because it failed to verify the candidate's overseas criminal record, causing legal disputes.
• health examination : foreign employees need to pass the physical examination of designated medical institutions, focusing on screening infectious diseases (such as tuberculosis, AIDS) and mental diseases. The validity period of the medical examination report is usually 6 months, and it needs to be retested after the deadline.

2. core processes: full-link operation from visa application to work permit

1. employment permit application
• material preparation : including business license, passport of foreign employee, labor contract, qualification certificate, etc. A manufacturing enterprise was delayed for 3 months after being required to supplement materials due to the lack of a clear salary structure in the labor contract.
• approval cycle : The approval cycle of provincial human resources and social security departments is usually 15 working days, but for complex cases, it may be extended to 30 working days. It is recommended that enterprises plan time nodes in advance.
• Permit Change : If the position, salary or work location of the foreign employee changes, they need to apply for permission change within 10 working days, otherwise they may face a fine. A consulting company was fined 20000 yuan for failing to change its license in time.

1. work residence permit
• visa conversion : foreign employees need to enter the country with a Z visa (work visa) and apply for a residence permit within 30 days. An executive of a foreign company was restricted from leaving the country and paid a late fee because he did not change the visa type in time.
• Duration of residence : The duration of the residence permit is usually consistent with the employment contract, and the maximum period is not more than 5 years. Before the expiration of 30 days in advance to apply for extension, overdue will affect the subsequent visa application.
• information change filing : after the address and contact information of foreign employees are changed, they need to file with the public security organ within 10 days. An Internet company did not record the new address of its employees, which prevented it from handling bank cards and other businesses normally.

1. social insurance and provident fund payment
• compulsory insurance coverage : foreign employees need to participate in endowment insurance, medical insurance, work injury insurance, unemployment insurance and maternity insurance, the contribution rate is consistent with that of local employees. An enterprise tried to replace social security through "cash subsidies" and was investigated and paid by the labor inspection department.
• provident fund payment : some cities (such as Shanghai and Shenzhen) require enterprises to pay housing provident fund for foreign employees, with the contribution rate not less than 5%. A financial institution was complained by employees and paid compensation for failing to pay provident fund.
• treatment enjoyment : when foreign employees leave their jobs, they can withdraw the balance of their personal pension insurance accounts and the full amount of their housing provident fund accounts in accordance with the law. Employees of a foreign company missed the deadline for applying for benefits because they did not understand the policy after leaving their jobs.

3. compliance management: construction of risk prevention and control system

1. labor contract design
• essential clauses : core clauses such as work content, work place, salary structure and liability for breach of contract shall be specified. An enterprise because the labor contract does not agree on the non-competition clause, resulting in the core technology leakage after the difficulty of accountability.
• Language version : It is recommended to provide bilingual contracts in Chinese and English, and it is clear that the Chinese version shall prevail. A multinational company due to the ambiguity of the contract language, causing a dispute between Chinese and foreign employees on the salary calculation.
• Probation period regulations : The probation period for foreign employees shall not exceed 6 months and can only be agreed once. An enterprise illegally extended the probation period and was ordered to pay compensation by the Labor Arbitration Commission.

1. daily management standard
• attendance and leave : the system of paid annual leave and sick leave shall be implemented according to the provisions of Chinese labor law. An enterprise was required to pay 300 per cent of its wages as compensation for not arranging annual leave for its foreign employees.
• Performance Evaluation : Establish a transparent and quantitative evaluation system to avoid evaluation bias due to cultural differences. A technology company because of the evaluation criteria vague, triggering foreign employees to "unfair dismissal" complaints.
• resignation procedures : work permit cancellation and residence permit change procedures are required for resigned foreign employees within 15 days. An enterprise due to delay, resulting in employees can not join the new company in time and claim losses.

1. cultural integration support
• cross-cultural training : provide training on Chinese culture, workplace etiquette and legal knowledge to reduce cultural conflicts. A manufacturing company through the "Chinese style communication" workshop, to help foreign employees understand the real intention behind the "implicit expression.
• language support : provide basic Chinese courses for foreign employees, focusing on learning vocabulary of work scenes (such as "performance appraisal" and "overtime approval"). Data show that after 3 months of language training, foreign employees and team collaboration efficiency increased by 40%.
• Life services : help solve housing, children's education, medical and other practical problems. A foreign company cooperates with local international schools to provide a green channel for children of foreign employees to attend school, which significantly improves employee satisfaction.

4. common risks and coping strategies

1. visa overstay risk
• coping : establish a visa expiration reminder mechanism and start the renewal process 60 days in advance. An enterprise automatically pushes visa expiration alerts through a digital management system to achieve a 100 per cent compliance rate.
• case : a foreign engineer was detained for 15 days for visa overstaying. the enterprise not only had to pay a fine, but also lost potential customers due to negative public opinion.

1. illegal employment risk
• response : regularly check the consistency between the work permit and the actual position of foreign employees. A training institution was revoked its school license for allowing foreign employees to engage in unauthorized teaching activities.
• case : in order to save costs, an enterprise let foreign employees work for a long time in the name of "business visit", which was finally found to be illegal employment and the person in charge was sentenced to administrative detention.

1. Labor dispute risk
• response : specify the dispute resolution method (such as arbitration or litigation) in the labor contract, and keep a complete record of the work. An enterprise lost the labor arbitration and paid double wages because it could not provide attendance records for foreign employees.
• case : a foreign employee filed a lawsuit on the grounds of "cultural discrimination", and the enterprise successfully defended by showing cross-cultural training records.

Conclusion

It is an important part of globalization strategy for enterprises to employ foreign employees, but compliance risks and cultural challenges cannot be ignored. From qualification audit to daily management, enterprises need to build a risk prevention and control system covering the whole life cycle, and improve team effectiveness through cultural integration support. In the future, with the application of digital technology (such as e-visa and blockchain qualification verification), the employment process of foreign employees will be more efficient and transparent, but the bottom line of compliance is always the lifeline of the international development of enterprises.