China Employment Law 2025: Working Hours Compliance Guide for Foreign Companies
Could a Single Employee Complaint Derail Your China Operations?
Imagine this: your Shanghai HR manager picks up the phone. A local employment bureau officer is on the line. Within days, inspectors arrive at your offices, your company name is in the Chinese press, and your expansion permits are suddenly “under review.”
For years, the 996 work culture (9 a.m. to 9 p.m., six days a week) was worn like a badge of honor in China’s tech and manufacturing sectors. But 2025 is different. Beijing has had enough. In a very public campaign, regulators are now enforcing long ignored limits: a 44 hour workweek with capped overtime. Some of China’s biggest companies are locking their doors earlier to prove compliance. Foreign firms that don’t move now risk becoming the next cautionary headline.
The Legal Reality: 996 Changed in 2025
Major Chinese employers are scrambling to show compliance with China employment law. Tech giant Tencent now requires employees to leave by 6:00 p.m. Midea has set a 6:20 p.m. cutoff, DJI locks its offices at 9:00 p.m., and Haier now promotes a five day workweek. These are not wellness perks. They are labor law compliance strategies. Regulators and state media have turned excessive hours into a political issue, and companies are moving fast to avoid being singled out. For more information on this crackdown, I urge you to read the following:
These headlines show how quickly the landscape is changing. For foreign companies, the real question is not whether the law applies, but how enforcement will affect their operations.
Foreign Companies in the Crosshairs
Compliance with China’s employment law is not optional, and foreign companies are firmly in scope. The laws have always been there, but the enforcement environment has completely changed. What was tolerated is now targeted, and foreign firms are seen as a way to set a high-profile example.
Why China’s 996 Crackdown Is Here to Stay
This is not a one-off campaign. It reflects deeper political and economic pressures shaping China’s governance in 2025:
China’s Shrinking Workforce: With its population in decline for the second consecutive year in 2023, Beijing sees endless 996 schedules as unsustainable. Protecting worker health is a strategic priority for long-term economic stability.
The “Common Prosperity” Narrative: Overwork has become a symbol of inequality and corporate exploitation. Cutting back hours reinforces the Party’s role as protector of the people.
Shift to High-Quality Development: Beijing wants companies to boost productivity through efficiency and innovation, not brute-force labor.
The message is clear: this crackdown is not temporary. It’s part of China’s broader social and economic agenda.
The New Financial Reality of Overtime
Overtime in China is not just discouraged — it is costly, and regulators are finally enforcing the rules. If your company doesn’t pay correctly, you are leaving a paper trail that makes you an easy target for investigation.
Here’s what the law actually requires:
Overtime Pay Rates
Weekday overtime: 150 percent of the normal wage (work beyond 8 hours in a day)
Rest day overtime: 200 percent of the normal wage (weekend work, if no compensatory time off is given)
Holiday overtime: 300 percent of the normal wage (statutory holidays such as Chinese New Year or National Day)
Legal Limits on Hours
No more than 3 hours of overtime in a single day
No more than 36 hours of overtime in a month
A maximum workweek of 44 hours
In practice, this means employees can work late only a few nights a week, and marathon 70-hour months are no longer legal. Every extra hour now carries a financial and compliance cost.
The key takeaway: overtime is capped, it must be paid at a premium, and regulators are looking closely at payroll records to confirm compliance. If managers push employees beyond these limits, they are not just breaking the law — they are creating a liability that regulators can expose with a single complaint.
Implementation Challenges for Foreign Employers
Even well-intentioned companies face hurdles in complying with China employment law:
Informal Overtime Pressure: Managers may still demand late nights “off the record,” creating hidden liabilities that surface the moment an employee complains.
Timekeeping & Payroll Red Flags: Payroll records and digital punch-in data are a paper trail Chinese employment regulators will use to prove violations. Any mismatch is ammunition for a labor bureau investigation.
Supply Chain Smoke Screens: Suppliers may pledge compliance while quietly maintaining 996 practices. If regulators trace abuses back to your brand, you’ll take the reputational hit.
The risks don’t stop at your door. They travel across your workforce and your supply chain. Start your compliance check now. Identifying risks internally is always cheaper than defending yourself in a public investigation.
How China Employment Investigations Actually Work
China has not passed new labor laws in 2025. The crackdown is based on long standing statutes capping the workweek at 44 hours. What has changed is the intensity and visibility of enforcement. Regulators are actively looking for violations, and when they find them, companies are being made into public examples.
Investigation Triggers
Employee complaints (the most common trigger)
Routine city wide inspections
Random compliance audits
Negative social media exposure
Union petitions
Related investigations (such as visa or social security issues)
Right now, regulators are focusing on tech and manufacturing giants. But SMEs, foreign firms, and service providers should not assume immunity. Worker complaints remain the most likely trigger for inspections, and whistleblowers have more leverage than ever.
Implementation Challenges for Foreign Employers
Even companies that want to comply with China’s labor laws often run into hidden problems. Regulators know this, and they use these weak spots as leverage in investigations.
Informal Overtime Pressure
Managers may still push employees to stay late “off the record.” Even if unpaid, these hours create liabilities the moment an employee complains.
Timekeeping and Payroll Red Flags
Payroll records and punch-in data are a digital paper trail regulators can and will use to prove violations. Any mismatch between recorded hours and actual practice is ammunition for an investigation.
Supply Chain Smoke Screens
Suppliers may promise compliance while quietly sticking to 996 schedules. If regulators trace labor abuses back to your brand, you will take the reputational and legal hit.
The risks don’t stop at your door. They extend across your workforce and your supply chain. The safest step is to start auditing now because finding problems internally is always cheaper than being forced to fix them under the spotlight of a labor bureau probe.
4 Essential Steps to China Labor Compliance
To avoid becoming the next target of China’s 996 crackdown, foreign companies should act now. Here are the four essential steps:
1. Audit Schedules and Records
Review employee hours and overtime data before regulators do. Look for patterns that exceed legal limits and flag any gaps between actual hours worked and what payroll systems record.
2. Revise HR Policies
Remove vague overtime expectations from contracts and handbooks. Replace phrases like “additional hours as needed” with specific terms that reflect China’s legal limits.
3. Verify Supplier Compliance
Written assurances are not enough. Use on site audits, employee interviews, and surprise visits to confirm supplier practices. If a supplier violates the law, the reputational damage will fall on your brand.
4. Train HR and Compliance Teams
Equip your staff to respond consistently to inspections and complaints. Establish clear protocols for documenting hours, communicating with regulators, and escalating issues when they arise.
Working hours compliance is more than legal housekeeping. It is a competitive advantage and a reputational benchmark that determines how successfully your business can operate in China.
FAQ: China’s Working Hours Crackdown
Does the crackdown apply to foreign companies in China?
Yes. Every employer in China must comply. Foreign firms are not exempt and, in fact, make attractive targets for regulators who want to send a message.
What is the legal limit for work hours?
The law allows an 8 hour workday and a 44 hour workweek. Overtime is capped at 3 hours per day and 36 hours per month, and all overtime must be paid at a premium.
What are the overtime pay rates?
150 percent of the normal wage for weekday overtime, 200 percent for weekend work if no compensatory time off is given, and 300 percent for statutory holidays.
Are senior managers or flexible roles exempt?
Not by default. Limited exemptions exist for senior management roles but these require formal labor bureau approval. Qualifying employees must have genuine decision-making authority, above-average compensation, and job duties requiring flexible hours. The approval process requires detailed documentation including job descriptions and org charts and most “managers” don’t qualify. Assuming exemption without written government approval is a major compliance risk.
How does this apply to remote or hybrid work?
Answering emails, WeChat messages, or late night calls can all count as work. Regulators increasingly treat after hours digital labor as overtime, making remote setups a hidden risk.
Can employees waive their right to overtime limits if they want extra pay?
No. Chinese law does not allow employees to give up protections against excessive overtime. Even if they request it, employers must stay within legal limits and pay the correct premiums.
Besides employee complaints, what else can trigger an investigation?
Routine inspections, random audits, negative social media exposure, union petitions, or issues uncovered during related probes (like visa or social security reviews).
Are SMEs affected?
Yes. While enforcement has started with major companies, smaller firms are legally bound by the same rules and should not assume they are flying under the radar.
How can companies check if suppliers are compliant?
Require written assurances, but do not stop there. Use audits, on site visits, and direct employee interviews to verify. Regulators will hold your brand responsible for supplier abuses.
What are the risks of non-compliance?
Investigations, mandatory corrections, public exposure, and in some cases restrictions on permits, expansions, or access to government incentives.
Conclusion: China Labor Compliance as Strategy
China’s crackdown on excessive working hours is not a temporary campaign. It is a structural shift in how Beijing expects companies to operate, and it applies to every employer — foreign or local.
Foreign firms that act now will protect more than just their legal standing. They will safeguard their ability to expand, attract talent, and keep their brands out of the headlines. The smart move is to conduct internal audits, update HR policies, and verify supplier practices before regulators, whistleblowers, or the press force the issue.
For more on China’s employment and overtime laws, check out the following:
