As businesses expand globally, companies are increasingly adopting innovative employment models to navigate local labor laws and streamline operations. One such model is the Em-ployer of Record (EOR), which allows businesses to hire employees in foreign markets without establishing a legal entity. In China, particularly in cities like Qingdao, under-standing employee risk protection within the EOR framework is crucial for both employers and employees. 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 official employer for workers on behalf of a company. While the company oversees day-to-day operations and manages the employee’s work responsibilities, the EOR handles administrative tasks such as payroll, tax compliance, and employment contracts. This model is particularly beneficial for foreign businesses navigating complex labor regu-lations in China.
However, while the EOR simplifies employment processes, it also introduces unique con-siderations regarding employee risk protection. Employees working under this structure in Qingdao must be aware of how their rights and benefits are safeguarded.
Key Risk Protection Areas
Employment Contracts
Under Chinese labor laws, employment contracts are mandatory and must clearly outline terms such as job responsibilities, compensation, working hours, and termination conditions. In an EOR arrangement, the contract is typically signed between the employee and the EOR provider. Employees in Qingdao should ensure that their contract complies with local labor regulations and accurately reflects their role and benefits.
Social Insurance Contributions
China mandates social insurance contributions for all employees, covering pensions, med-ical insurance, unemployment insurance, work-related injury insurance, and maternity in-surance. In an EOR setup, the provider is responsible for ensuring these contributions are made on time and in accordance with local policies. Employees should regularly check their social insurance accounts to confirm that contributions are being properly managed.
Workplace Safety and Health
While the EOR handles administrative tasks, the company overseeing daily operations re-tains responsibility for workplace safety and health. Employees in Qingdao should be aware of their rights to a safe working environment and report any risks or violations to both the company and the EOR provider.
Dispute Resolution
In cases of disputes regarding wages, benefits, or termination, employees may face com-plexities due to the dual involvement of the EOR provider and the company. It is important to understand which party holds accountability in specific scenarios and seek legal advice if necessary. Clear communication channels between employees, the company, and the EOR provider can help mitigate misunderstandings.
Best Practices for Employees in Qingdao
To ensure comprehensive risk protection under an EOR model, employees can take proac-tive steps:
1. Review Contracts Thoroughly: Understand every clause in your employment contract and seek clarification on ambiguous terms.
2. Monitor Contributions: Regularly verify that social insurance payments are correctly processed.
3. Stay Informed: Familiarize yourself with Chinese labor laws and local regulations specific to Qingdao.
4. Communicate Issues Promptly: Address concerns with both your direct employer and the EOR provider to ensure swift resolution.
Conclusion
The EOR model provides significant advantages for businesses operating in China while offering employees access to stable job opportunities. However, understanding risk pro-tection measures is vital to ensure compliance with local labor laws and safeguard employee rights. For workers in Qingdao, staying informed and proactive is key to thriving under this innovative employment arrangement.
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.