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Raoul Duke - 2010-03-18

The Basics of Evaluating a Chinese Employment Contract

The contract is of course the essential document in establishing your relationship with your employer. Once signed and submitted by both parties, you're going to have to live with the terms it specifies... so you'd better get it right before you sign it! In general, it's much easier for you to get what you want while you're negotiating than it is to change a standing contract later.

This post hopes to serve as a general guide to interpreting an offered contract, so that you'll know what terms - if any - need to be negotiated and changed before you sign it... and when to just walk away.

Let me begin by offering a bit of general advice: never sign a contract, or give a final answer - either 'yes' OR 'no' - during your first meeting with an employer. Chinese schools can be quite adept at putting heavy pressure on you to accept and sign a contract immediately, and may not always be completely truthful in the means they use to do so, but it's in your own best interest to not let these tactics succeed. You have EVERY RIGHT to a reasonable period to read carefully, think things through, and to seek specific information or advice before saying 'yes', and it never hurts to leave the doors open to negotiation before saying 'no'. Never let yourself be pressured away from making an informed, optimal decision!

Also, ALWAYS get everything IN WRITING! NEVER take an oral agreement in China. Written contracts may not always be worth much in this country, but I can assure you that a spoken agreement is worth much, much less. In China, you can safely assume that if it ain't in writing, it just ain't happening. Your school may not be too happy to admit this, but it's quite easy to change a written contract in China as the result of negotiations. All they have to do is type up a written document stating the changes, and put the school's chop ("red stamp") on it, and both sides sign it. The document should be clearly titled something like "Appendix to Contract of (contract date) Between (your employer) And (your name). The document should also explicitly state that terms in the appendix supercede contradictory terms in the original contract.

Now, let's look at the major items you should be looking for in a contract:

- Salary Everybody's #1 concern! It's impossible to put a specific figure into a general guide, given the many different kinds of jobs on offer, the different hour loads you can be asked to accept, and the highly divergent standards and costs of living in different regions and cities across China.

But it's at least reasonable to assume that the salary offered should meet your personal needs, be a fair match for the hour load you're being given (and we'll look further into this later), and be reasonably competitive with your local market. To learn local market conditions, ask local expats what they are making. Get online and go to the job-listing sites, and take a look at the salaries being offered by comparable jobs... especially those in your city or region. Ask the forums what they know about salary levels in your chosen city. Be informed before you sign!

- Working Hours It's impossible to make a good judgment about salaries without also understanding this dimension... the two ideas are inextricably linked. First and foremost, your contract should be completely CLEAR and SPECIFIC in stating the MAXIMUM number of hours you can be required to work for your basic salary! Some contracts have been seen lately that were deliberately vague about the number of hours you can be called upon to work; you should NEVER UNDER ANY CIRCUMSTANCES sign such a contract until these things are straightened out in writing.

Quite often, working hours are divided into classroom hours and non-classroom hours. You can be asked to take on some non-classroom duties such as office hours, English Corners/English Salons, sales and publicity work, testing and evaluations, Movie Nights, and so on. This is fine, and you should readily agree to such work... with the understanding that IT IS WORK, and you're going to be paid for it.

Therefore, your contract should clearly state the TOTAL number of hours you can be required to work each week, and be explicitly divided into the maximum number of classroom hours, and the maximum number of non-classroom hours, you'll be expected to work each week. Again: if these obligations are not spelled out in a manner that's completely CLEAR and SPECIFIC... DON'T sign the contract until this gets fixed... in writing.

Some good general guidelines: For public schools and universities, don't agree to more than 16 hours classroom and 5 hours non-classroom per week. For training centers, don't agree to more than 25 hours classroom and 5 hours non-classroom per week. If the employer wants more than this, only do so if your pay is increased proportionately. If the employer refuses to agree to this, fine... don't sign the contract, walk away to find an honest deal, and leave this stinker for some other fool to fill.

Sometimes employers want you to attend school parties at no pay. As long as this doesn't exceed an hour or two per month, what the hell... suck it up and go mingle. ANYTHING else, though... get paid or don't do it. You're a paid worker, not a slave or a servant.

- "Farm-Outs" Some schools cover their costs and make extra money by loaning you out to other schools - for example, a private school may book you into some hours teaching a local public elementary school. Such a possibility must be covered in your contract - if it's not, don't let them force it on you against your will. Not all of these deals are bad, but you might want to discuss and negotiate the details of how they work. If they send you a private car (or at least cover taxi costs), making these transitions is pretty effortless. If they're going to throw you a bus token and have you out covering Harbin in January (or Chongqing in August), then you may want to reconsider taking the job.

- Overtime Now that your base salary hours have been made clear, it's very easy to state that hours worked beyond that base will be paid at an hourly rate that's clearly stated in the contract. It should be made explicitly clear that overtime applies to ALL work performed, not just classroom teaching. It should be made explicitly clear that overtime is calculated on a reasonable time basis, such as "anything over X hours per day or Y hours per week." And finally, it should be made explicitly clear that overtime is ALWAYS optional, with the consent of both parties. Quite often the overtime rate offered by schools is terribly low, especially in public institutions, and it just isn't worth taking on that basis. Your employer DOES have the right to forbid your taking outside part-time work (and we'll talk more about that later), but they DON'T have the right to force you to work more hours at the ridiculous rate they want to pay you for it.

- Contract Duration Your contract should specify the beginning and ending dates of its effectiveness. Take a look - does the contract cover a 12-month calendar year (more common with private schools) or a 10-month "academic" year (more common with public schools)? If it's a 10-month, unless you're leaving China you'll have to figure out what to do with yourself for those 2 extra months... and remember, quite often when your contract ends, your residence permit and your housing will end along with it. If you're going to sign with the school for another year, sometimes you can negotiate permit and housing coverage over the interim... but probably not salary. Many universities have small, low-key Summer programs, but jobs in them are few. You may have to consider taking a Summer-camp job (ugh...) or even going back home until the Summer passes.

- Taxes Even on the other side of the world from home, you may still have to deal with Rendering Unto Caesar. So it's important to know up front - is that advertised salary subject to taxation? If so, what's the tax rate? Any expectation of paying taxes should be clearly stipulated in the contract. They don't have to include an exact amount or rate, but there are a number of internet resources that can show you the "legit" way your income taxes should be calculated. You also have the right to ask your employer at any time exactly how your tax amount was determined. Keep an eye on this... "taxes" can be another way for employers to skim your salary. It's probably pretty safe to say that some, if not all, of the "taxes" you pay never reach the Tax Bureau. There's not much you can do about that, but if the taxes taken out don't pretty much foot to the official tax calculation, or seem wildly inconsistent from month to month, it's time to make some noise.

- "Probation Periods" It has become very trendy for Chinese contracts to stipulate a "probation period" that lets them pay you less for the first 1-3 months of your contract. You'll see language like, "Party A will pay Party B a monthly salary of 5000 RMB per month for the first 3 months of the contract, then beginning the 4th month Party A will pay Party B a monthly salary of 6000 RMB a month for the duration of the contract."

Folks, this is nothing more than STEALING, pure and simple. It has absolutely nothing to do with evaluating you as a teacher, and absolutely everything to do with keeping some of your money for themselves. Any new job just about anywhere comes with a trial period during which they can fire you, or you can resign, with no reason and no penalty. They have no basis or excuse for paying you less... you're still doing the same work, and the students aren't paying less in tuition. It's just plain ol' stealing. Schools try it because too many of us foreigners are too clueless, or too timid, to stand up for ourselves and refuse it.

Therefore, I advise you... no, I implore you, I charge you, and I obligate you: NEVER sign a contract that has this kind of nonsense standing in it... for any duration, or for any amount of money. If they don't like you, let them fire you... but don't let them steal from you in the process.There are still plenty of schools that don't try and pull this crap on you. If your prospective employer won't back down on this one, don't sign the contract, walk away, and go find someone you can work for.

Think about it: do you really want your relationship with your new employer to START with them outright stealing money from you? Do you really think such an employer will hesitate to find other ways they can rob you, further down the road?


- Exclusivity/Non-Competition Clauses Most contracts come with a stipulation that you not work for anyone else while the contract is effective. These clauses are widely violated by foreign teachers, but they're actually pretty reasonable things to ask. And, it's quite often not necessary to do outside work on the sly! Schools tend to worry about two things here: 1) That you not take food off their table by working with their direct competition, and 2) that your outside work not distract you from your full-time work or limit their ability to schedule you as they need you. As long as you can avoid these conflicts, most schools won't object to your taking a few outside classes... and being open about things is almost always better than sneaking around.

- Visas and Permits This is an extremely critical section of the contract! I'm assuming by now that you have already made sure that the school will provide you with a Work Permit/Foreign Expert Certificate and a Residence Permit; if they don't, you shouldn't even be considering signing a contract with them. These documents are absolutely required to live and hold a full-time job in China, and without them you will be in essence an illegal migrant worker - not a position you want to be in in China!

Anyway, you want to be sure that the contract explicitly spells out that the school will give you the permits, and will pay for them. Some schools' contracts include provisions obligating you to pay the pro-rated cost of the permits back if you don't fulfill the contract. This is actually reasonably fair, but something to consider if you're not entirely confident in the job you're taking... you should at least be aware that it's there. Also, you may be required to pay for the visa that gets you into the country. This can be acceptable as long as the contract specifies that they will follow up by getting your Permits once you're in China. If the school requires you to go to Hong Kong to upgrade your visa, they should pay the transit and lodging costs in addition to the permits. Some contracts specify that you have to pay for your own permits, and they will just sponsor you. Kinda cheap and tacky? Yeah... but not necessarily a deal-killer if the contract is otherwise good enough.

- Medical Benefits Many university and public-school jobs come with some sort of medical coverage; it's pretty rare in the private sector. There are exceptions, but in most cases your expectations for this should be pretty low. HMO-type medical insurance, where the hospital bills the insurance company directly, is almost unheard-of in China. For the most part, at best you'll have a plan where you pay everything up front, then get reimbursed by the school. At worst, they offer a flat amount - 1,000-2,000 RMB - per year for medical expenses. Some only offer free care at a grubby, minimal campus clinic. There can be a lot of exceptions on what is and isn't covered, too. I had one job in Shanghai that would reimburse costs of treatment at a particular hospital in Shanghai - but if I ever traveled and needed medical care in another city, they wouldn't pay anything at all. If medical coverage is important to you, take a good long close look at what your contract specifies - and don't be afraid to ask questions.

- Housing: Provided Housing The immediate concerns here are the same as any other apartment, anywhere... is the apartment safe, clean, functional, and adequate for my needs? For many expat job hunters, a PRIVATE apartment is an absolute must. Please go to the forums and read the writings of various people. Then ask yourself: "Would I want to share an apartment with any of these wankers?" The answer is, of course, a resounding 'No!' Most of us want to pursue our own thing without having a roommate in the way. At the same time, schools save money by doubling up teachers and many, especially the chains, are reluctant to agree to single apartments. Make sure your contract specifies a single apartment - watch out for weasel language like "private bedroom" - before you sign anything. You should also get specification of who pays the utilities for the apartment... electricity, especially, can be pretty high in the coldest and hottest months. School-provided housing should be furnished and outfitted, and the school should be responsible for maintenance of the apartment.

- Housing: Housing Allowances In this scenario you are responsible for getting your own apartment, and the school pays you a monthly stipend for rent. There are a couple of things to consider with this. One, does the stipend cover at least most of your monthly rent? Doesn't necessarily have to cover all of it, but it should come close. Some schools offer allowences that are well under actual local rental costs for expat-friendly housing - and you need to know this before you sign on. Do the research and try to find the real local rental rates before you sign! Then, there's also the question of move-in costs, and these can be very high in China. In some places, it can cost you up to 5 months' worth of rent before you even get the front door key - 3 months of rent, one month as deposit, and one month for the realtor fees. So moving into, say, a 2500 RMB/month apartment could cost you up to 12,500 RMB just to open the door! If you're not prepared to pay this much (that's around US $2000!) then you need to try and work it out with your school. Some schools will pay some of the costs for you, and some will loan you the money and pro-rate it over your future paychecks. So, before taking that allowance, make sure you can actually afford what it entails.

You can read more details about Chinese apartments at raoulschinasaloon.com

- Airfare Reimbursement/End-Of-Contract Bonus These are really the same thing. This used to cover the full round-trip cost of travel to and from China, but then the price of a one-way ticket became more commonly seen. Now, some schools only offer a token amount - a few hundred RMB - or even none at all. If you really need this bonus to fund your flight home, or an inter-city move, then make sure the bonus is adequate for your needs. Otherwise, you might want to consider - if the school doesn't give this bonus but pays a premium salary, you might come out better financially with the higher salary.

Note that if your school ever decides to rip you off, this bonus will be one thing certain to go. But if the salary is too low to allow savings, then this bonus is a must.

- Holidays Contracts at public institutions will generally offer a lot more holiday time than those at private schools. You want to check a few things here. First, make sure that you don't end up making up all those "holidays" by working extra days - typically on weekends or your other normal days off. Be aware that this is a very common practice in China and almost impossible to completely avoid, but you can at least avoid excessive use of it. Also, bear in mind that Chinese holidays can be quite long, especially for public school and university teachers - a month or more for Spring Festival, and two months or more in the Summer. Holiday periods can sometimes be largely unpaid or paid at a much lower rate, so read the contract carefully and be sure your budget can endure the offer you're getting.

- Chinese Lessons In reality, at many schools these never actually happen, even if they're in your contract. Even when they are offered, the quality of the classes is notoriously bad... admittedly often due to the students not taking it very seriously. Don't let this be a deal-breaker or a point of contention. It's easy and cheap (sometimes free) to find Chinese classes and tutors in China.

- Internet Access Often specified in contracts, but all too often what they mean is you can use the internet at a desk in the school offices, typically on a slow, virus-ridden, vastly over-burdened, and heavily-firewalled campus network. Increasingly, more schools are providing network access in campus housing, and some will even give you the use of a computer at home. If internet use is important to you - which kind of goes without saying, with you teaching in a foreign country - then you should be clear on what's available to you. In most cities high-speed internet can be installed in an apartment for a very reasonable cost, but if you're in campus housing they may not take kindly to your bringing in an outside internet access.

- Miscellaneous Small Stipends Many contracts, especially public school and university contracts, tack on a variety of small stipends, in various fiddling amounts and for a variety of reasons- travel, phone use, food costs, medical expenses, and so on. They're a way public schools can sweeten contracts where the salary is heavily regulated. Generally, these things won't make much impact on your life one way or the other, and aren't worth quibbling over.

- Curfews and Travel Restrictions A few schools - invariably those with campus housing - will impose a curfew on teachers, with gates being barred and doors being locked after a certain point. Other schools will try and require you to notify them any time you leave the area. These, of course, can't be accepted under any circumstances... they are either negotiated away or walked away from or in the latter case simply ignored. You're a big kid now, right? If you're in school housing, you need to ask in advance about any such limitations on your freedom of action, even if they're not specified in the contract!

- Morality Clauses Many contracts come laden with a lot of language about moral conduct (ie Not Sleeping With Students), observing cultural mores, not proselytizing, observing the laws of the land, and so on. Most of these are actually reasonable, and in most cases this language doesn't mean much anyway. Most schools are simply not going to invest all that much into seeing what you're up to all the time. At the most, they'll make you easier to prosecute if, say, the entire Junior Girls' Glee Club turns up pregnant, you naughty monkey you. If you see something you find too restrictive in these clauses, try and negotiate it out. Otherwise, just accept these as part of working in China.

If you're satisfied on all these points that apply to you, then you just might have a good contract. Congratulations!

If you need help or support on contract matters, that's part of why places like ESL Teachers Board and Raoul's China Saloon are here. Come talk to us!

About The Author: Raoul Duke hails from one of those American states where most residents are 3rd cousins or closer. He is the former US Ambassador to Neptune. A world-renowned expert in Slang & Colloquial Esperanto, he is also noted as a leading connoisseur of Canadian fortified wines. Before coming to China, he had a distinguished career as choreographer for hundreds of industrial training films. Today, he ekes out a miserable existence as an English shouter at some dodgy school or other, and was the DJ and Marketing Gargoyle for Suzhou's Shamrock Bar. To atone for the sins of past lives, he serves as Benevolent Despot at Raouls China Saloon (http://www.raoulschinasaloon.com), an online forum where the seriously deranged can get the counseling, support, and recipes they so desperately need. He relaxes by raising purebred silverfish and randomly planting land mines.

[Edited by Administrator (admin) Sat, 14 May 2011, 03:45 AM]

Messages In This Thread
China: The Basics of Evaluating a Chinese Employment Contract -- Raoul Duke -- 2010-03-18
Re: China: The Basics of Evaluating a Chinese Employment Contract -- dbrownridge -- 2013-02-20
Re: China: The Basics of Evaluating a Chinese Employment Contract -- Mancunian S -- 2013-02-21
Re: China: The Basics of Evaluating a Chinese Employment Contract -- Curious -- 2013-02-21
Re: China: The Basics of Evaluating a Chinese Employment Contract -- Dragonized -- 2013-02-22
Re: China: The Basics of Evaluating a Chinese Employment Contract -- San Migs -- 2013-02-21
Re: China: The Basics of Evaluating a Chinese Employment Contract -- Dragonized -- 2013-02-22
Re The Basics of Evaluating a Chinese Employment Contract -- Kanadian -- 2011-03-22
Re The Basics of Evaluating a Chinese Employment Contract -- Tom -- 2011-03-08
Re: Re The Basics of Evaluating a Chinese Employment Contract -- Raoul F. Duke -- 2011-12-21
Re The Basics of Evaluating a Chinese Employment Contract -- Kanadian -- 2011-03-09
Re The Basics of Evaluating a Chinese Employment Contract -- Tom -- 2011-03-09
Re: Re The Basics of Evaluating a Chinese Employment Contract -- Raoul F. Duke -- 2011-12-21
tax ememption for expats in China -- Kanadian -- 2011-03-06
Re tax ememption for expats in China -- Unhappy Camper -- 2011-03-07
Re tax ememption for expats in China -- Kanadian -- 2011-03-07
Re tax ememption for expats in China -- Unhappy Camper -- 2011-03-07
Re tax ememption for expats in China -- Tom -- 2011-03-07
Re tax ememption for expats in China -- Kanadian -- 2011-03-08
Re tax ememption for expats in China -- Tom -- 2011-03-08
Re tax ememption for expats in China -- Kanadian -- 2011-03-07
Re tax ememption for expats in China -- Crap School Spotter -- 2011-03-07
Re tax ememption for expats in China -- Tom -- 2011-03-08
Re tax ememption for expats in China -- Kanadian -- 2011-03-08
Re tax ememption for expats in China -- Crap School Spotter -- 2011-03-08
Re tax ememption for expats in China -- Kanadian -- 2011-03-09
Re tax ememption for expats in China -- Lip Stick -- 2011-03-09
Re tax ememption for expats in China -- Kanadian -- 2011-03-09
Re tax exemption for expats in China -- Kanadian -- 2011-03-07
Re: The Basics of Evaluating a Chinese Employment Contract -- KJR FM -- 2010-03-21
Re: The Basics of Evaluating a Chinese Employment Contract -- englishgibson -- 2010-03-19
Re: The Basics of Evaluating a Chinese Employment Contract -- Raoul Duke -- 2010-03-20
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