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Legal Solutions for Contract Dispute between US Executive and Chinese Employer

A foreign executive was hired by a large multinational company in China, but after signing the relevant agreements, the executive discovered some unfavorable terms in the contracts and documents, unsure if they complied with Chinese labor laws. Despite multiple inquiries to the employer's HR manager yielding unsatisfactory responses, the executive realized their position as an employee was weak and sought help from a Chinese lawyer.



Therefore, the executive contacted the legal team of Lawyer Zhou Shichao at Landing (Shenzhen) Law Office to seek legal advice regarding the issues in the agreements signed with the foreign employer. Lawyer Zhou Shichao's team provided comprehensive legal consultation based on the client's specific concerns, thoroughly clarifying doubts and offering appropriate legal advice.



Firstly, regarding the salary issue, based on the materials provided by the client, it was found that the employer illegally withheld a portion of the client's salary, which although a small amount, violated legal provisions. Therefore, the client was advised that if negotiations with the company were unsuccessful, he could consider filing a complaint with the local labor administrative department to demand full payment of the withheld salary, otherwise, the company would be liable to pay corresponding compensation.



Secondly, concerning the probationary period and annual leave, advice was provided to the client regarding the company's refusal to grant annual leave in the first year of employment. According to relevant regulations in Chinese Paid Annual Leave Regulations, the client was entitled to take annual leave in the first year of employment, rather than having to wait for one year of tenure with the current employer.



Furthermore, the probationary period stipulated by the company exceeded the statutory limit, violating provisions of the PRC Labor Contract Law, rendering the probationary clause invalid. The client was advised to leverage this as one of the bargaining chips in negotiations with the company to assert his legal rights.



Lastly, regarding the retention bonus issue, detailed legal analysis and advice were provided to the client regarding the company's refusal to pay the retention bonus upon early retirement or resignation. While the law does not explicitly prohibit retention bonuses, several cases supporting companies' use of retention bonuses to incentivize talent retention were identified. Despite the potential unfairness to the worker, the client was duly cautioned about the risk of forfeiting the retention bonus if he terminated the contract with the company prematurely.



Through in-depth legal research and comprehensive analysis, we addressed the client's concerns and provided corresponding legal solutions regarding labor contract issues such as salary, annual leave, probationary period, and retention bonuses. This empowered the foreign executive with knowledge of his protected rights under Chinese laws, enabling him to better advocate for himself in negotiations or disputes with the employer.



If you encounter similar legal issues or require further assistance, please feel free to contact us. We are committed to providing professional legal consultation and services.

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