Our China attorneys are constantly assisting overseas companies established up companies in China — typically wholly overseas owned enterprises or WFOEs. As part of these WFOE formations, we enable our customers with their work issues that crop up right before, all through and soon after the WFOE is formed. One of the points we often do for our WFOE development customers is draft the work documents they will need to have for their freshly established WFOE.
When a WFOE is up and running, it requires personnel agreements in location for all its workers. When we are known as on to offer China work law guidance to China WFOEs-to-be and freshly minted WFOEs, we typically endorse what we phone an Preliminary Work Package deal, which consists of the next for every personnel:
- Employment Contracts
- Guidelines and Laws
- Trade Secrecy and Mental House Security Agreements
- Sign Off Agreements, (acknowledging every employee’s receipt of the Guidelines and Laws)
Obtaining the over for your workers is critical to functioning as a WFOE in China with workers. If all you have is an work contract, you are not completely shielded. Precisely, your technical insider secrets or other trade insider secrets and the relevant intellectual residence legal rights are not properly shielded as against your workers. And you ikely will have no recourse against an errant personnel no matter what the employee’s wrongdoing, given that you do not have a established of China-centric Guidelines and Laws to facilitate penalties or termination.
Your Guidelines and Laws need to have to get the job done for your particular locale(s), so if you have many destinations in China, you need to have separate, standalone guidelines personalized for every area. Your work contracts also really should be localized. For more on the need to have to localize your China work documents, see China Work Law: Nearby and Not So Easy. We have labored with 1) companies with a single WFOE and workers all over China, 2) with companies with many WFOEs, a single for every town, and 3) with WFOEs with branch workplaces in every town in which they have workers. Every of these structures have to have various documentation.
We also routinely draft non-compete agreements and these also virtually often need to have to be personalized to the particular circumstance, with that typically depending on the positions of the workers and their salaries and the shelf-existence of the information that requires preserving.
An additional common work law concern we see with new WFOEs is what they can and really should do with workers who get the job done adaptable several hours. It is critical to note that your new workers typically simply cannot be designated to get the job done under China’s adaptable functioning several hours process until finally you have attained the vital govt approval for the WFOE and it is up and running.
It pays to start out with a sturdy work law and doc foundation for your China WFOE.