Not all work agreements are the same. In China, full-time labour contracts, part-time labour contracts, and service contracts each come with different rules, responsibilities, and protections. Understanding these differences helps employers and workers know their rights, avoid legal risks, and ensure smooth working arrangements.
Let’s take a closer look at each type of contract, their legal relationships, rights and obligations, and how they differ in practice.
Nature of the Contract and Legal Relationship
A full-time labour contract creates a long-term and stable working relationship between the employee and the employer. The employee becomes a formal member of the company and works under the employer’s management. They are expected to follow company rules, such as attendance policies and work procedures, and dedicate themselves fully to assigned tasks.
A part-time labour contract establishes a formal employment relationship on a part-time basis. The employee is a formal part-time staff member and must follow management rules, such as attendance checks and work process guidelines.
A service contract (civil agreement) is an agreement where the service provider is independent. There is no management-subordination relationship, and the provider is only required to deliver the agreed-upon results or services.
Applicable Laws and Regulations
Full-time labour contracts are mainly governed by the Labour Contract Law, the Labour Law, and the Social Insurance Law of the People’s Republic of China. Part-time labour contracts are primarily governed by the Labour Contract Law and the Social Insurance Law. Service contracts (civil agreements) are primarily governed by the Civil Code of the People’s Republic of China (Contract Book).
Legal Working Hour Requirements
For full-time labour contracts, working hours must not exceed 8 hours per day and 40 hours per week, with overtime compensated according to law. For part-time labour contracts, daily hours cannot exceed 4 hours, and weekly hours must not exceed 24 hours. Service contracts have no statutory limits on working hours, with schedules agreed based on project cycles or fixed durations.
Working Time
Full-time employees follow working time arrangements set by the employer, usually based on operational needs, such as fixed hours from Monday to Friday. Leave or adjustments must follow the company’s procedures. Part-time employees’ hours are determined by the employer within the daily limit of 4 hours. Contractors under service contracts set their own working hours unless otherwise agreed for special circumstances.
Workplace
For full-time and part-time labour contracts, the workplace is designated by the employer, either at company premises or other assigned locations. Any changes must be agreed upon and documented. For service contracts, the workplace is determined by mutual agreement, and the employer cannot mandate where the contractor works.
Requirements for Work Equipment
Full-time and part-time employees are provided with necessary work equipment, protective items, and a safe, healthy work environment. Contractors usually provide their own equipment, such as computers or cameras, unless otherwise agreed in the contract.
Payment of Social Security and Housing Provident Fund
Employers must pay social insurance—including endowment, medical, unemployment, work-related injury, and maternity insurance—and the housing provident fund for full-time employees. Part-time employees are covered for work-related injury insurance and, in some regions, additional contributions such as basic pension or medical insurance. Contractors under service contracts are responsible for their own social insurance and housing fund contributions, unless otherwise agreed.
Protection of Core Rights and Interests
Full-time employees are entitled to statutory rights such as public holidays, annual leave, sick leave, marriage leave, maternity leave, overtime pay, minimum wage protection, and fair treatment in training and promotion. Part-time employees have similar rights, including annual leave, overtime pay for hours exceeding limits, and minimum wage protection. Service providers receive only the remuneration agreed in the contract, and other rights are subject to mutual agreement.
Payment of Remuneration
Full-time employees are paid according to the wage standard, payment cycle, and method in the labour contract, generally monthly, with no unreasonable deductions or delays, and not below the local minimum wage. Part-time employees must be paid at least the local part-time minimum wage, in full and no later than every 15 days. Payment for service contracts is freely agreed upon, based on milestones, project completion, or other terms, with no minimum wage requirement.
Termination of Contract and Liability
Full-time labour contracts are terminated according to legal provisions or agreed circumstances, such as contract expiration, pension eligibility, or employer bankruptcy. Illegal termination by the employer requires economic compensation. Part-time contracts may be terminated by either party with notice and no compensation obligation. Service contracts are terminated based on contract terms, with no general requirement for economic compensation; a breaching party is liable for losses or liquidated damages under the Civil Code.
Key Risk Warnings
If a service contract includes clauses requiring the worker to follow the company’s attendance system, use company equipment, or accept management, it may be considered a de facto labour relationship. In such cases, the company could be legally obligated to pay social insurance and may face legal liabilities for non-compliance.
Conclusion
Understanding the differences between full-time labour contracts, part-time labour contracts, and service contracts is essential for both employers and workers in China. Full-time and part-time contracts create formal employment relationships with defined rights, obligations, and protections, while service contracts establish an independent working arrangement with more flexibility but fewer statutory protections. Choosing the appropriate contract type ensures legal compliance, protects the interests of all parties, and helps avoid potential disputes or liabilities. Clear agreements and proper management of each contract type are key to a smooth and effective working relationship.
Quick Takeaway
Full-time and part-time labour contracts create formal employment relationships with clear rights, obligations, and legal protections, while service contracts involve independent providers with more flexibility but fewer statutory benefits. Understanding these differences helps employers stay compliant, protects workers’ rights, and ensures smooth working arrangements, avoiding legal risks and disputes.
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Not sure which contract is right for your team, or need help creating agreements that are fully compliant? Reach out to our team today. We will guide you through the process, protect your interests, and make sure your working relationships run smoothly.
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