As businesses expand globally, companies often adopt innovative employment models to streamline operations and reduce administrative burdens. One such model is the Employer of Record (EOR) arrangement. In Dongguan, a key manufacturing hub in China, the EOR model is increasingly utilized to manage workforce needs efficiently. However, under-standing employee risk protection under this model is crucial for both employers and em-ployees. Click here to see ChaadHR China Employer of Record EOR hiring guide.
What is the EOR Model?
The Employer of Record (EOR) model is a legal arrangement where a third-party organi-zation acts as the nominal employer for a company's workforce. While the client company retains operational control of the employees, the EOR handles administrative responsibilities such as payroll, tax compliance, and labor contracts. This model allows foreign businesses to hire local talent in Dongguan without establishing a legal entity in China.
Although convenient, the EOR model introduces unique considerations regarding employee rights and risk management. It is essential for employees to be aware of their protections under this arrangement.
Key Employee Protections in Dongguan
1. Labor Law Compliance
Under Chinese labor laws, employees working through an EOR arrangement are entitled to the same rights as those hired directly by a local company. These include protections related to wages, working hours, overtime pay, and social insurance contributions. The EOR pro-vider is legally obligated to ensure compliance with these regulations on behalf of the client company.
Employees in Dongguan should regularly verify that their social insurance contributions, including pension, medical insurance, and housing fund payments, are being made accu-rately and on time.
2. Workplace Safety
Dongguan's industrial landscape often involves manufacturing environments where work-place safety is paramount. Under Chinese law, employers—whether direct or through an EOR—must provide a safe working environment. This includes proper training, protective equipment, and adherence to safety standards.
Employees should report any concerns about unsafe conditions to their employer or the EOR provider. They have the right to refuse work that poses immediate danger to their health or safety.
3. Termination and Severance Rights
In cases of contract termination, employees under an EOR arrangement are entitled to severance pay if applicable under Chinese labor laws. The EOR provider must adhere to legal procedures for termination, ensuring fair treatment and compensation.
Employees should familiarize themselves with their employment contract terms and consult local labor authorities if disputes arise.
Tips for Employees in an EOR Arrangement
- Understand Your Contract: Review your employment contract carefully to ensure it aligns with Chinese labor laws and clearly defines your rights and benefits.
- Stay Informed: Keep track of your social insurance contributions and seek clarification from your EOR provider if discrepancies occur.
- Communicate Issues: Address any workplace concerns promptly with your EOR provider or HR representative.
- Seek Legal Advice: If disputes or uncertainties arise, consult a labor lawyer or local labor bureau for guidance.
Conclusion
The EOR model offers significant advantages for businesses operating in Dongguan, providing flexibility and ease of compliance with local regulations. However, it is critical for employees to understand their rights and protections under this arrangement. By staying informed and proactive, employees can ensure their well-being and security while con-tributing effectively to their organization’s success in this thriving industrial city.
How Chinese Employer of Record (EOR) Works
As a local Employer of Record (EOR), we take on the legal responsibility of employing your new workforce in China. While you manage the day-to-day activities of your employees, we legally hire them through our agency. ChaadHR operates in over a hundred countries and utilizes local networks of experts to gain in-depth knowledge of local laws and regulations, as well as recruitment customs and trends. By partnering with us as an EOR, you gain access to this expert knowledge, which can be invaluable when expanding your business into China.
Our employment contract with your employees complies with Chinese labor laws and includes benefits such as insurance and pensions. We can hire, onboard, and manage your new employees in China in a matter of days, ensuring a fast and efficient process.
Hereis how we can assist you:
- We ensure that your new hires are compliant with Chinese laws and regulations.
- We take care of the employment contract, HR (Human Resources) matters, taxes, and payroll.
- We arrange the required visas or work permits for your employees.
- Our team keeps your employees informed about holiday arrangements, benefits, and any changes in labor laws.
- We keep you updated on changes in local laws and ensure that we comply with them.
-Your employees' declarations are forwarded to us on a monthly basis. Once we receive your payment, we deduct taxes and other contributions, and ensure that your employees receive their salaries promptly.
- You retain control over the daily activities and responsibilities of your employees.
🌎💼Compliantly Hire and Pay Talent in 160+ Countries With ChaadHR
With our comprehensive Global Employer of Record (EoR) solution and integrated Global Payroll solution, we empower businesses to confidently and compliantly hire and pay their workforce in over 160 countries. By partnering with ChaadHR, companies can eliminate the burdensome task of entity establishment and navigating complex labor laws, while ensuring their payroll operations are fully compliant with local regulations.
ChaadHR helps businesses expand globally. We provide support for testing new markets, hiring employees, and setting up subsidiaries. Our platform offers compliant onboarding of international contractors, remote employee hiring, and consolidated payroll management through a single dashboard. Book a demo to learn more.