Chinese law recognizes fixed-term, open-ended and task-completion employment contracts. A fixed expiry date can provide planning certainty, but it does not let an employer end employment early without a statutory ground, and repeated fixed terms can trigger an employee's right to an open-ended contract.
Employers should manage the written-contract deadline, renewal decision, protected employees, compensation at expiry and documentary record well before the end date. Local interpretation and the facts of each renewal remain important.
Three contract types
The Labor Contract Law recognizes a fixed-term contract ending on an agreed date, an open-ended contract without a fixed expiry date, and a contract ending when an agreed task is completed. The label should match the actual arrangement and lawful termination rules.
Written-contract deadline
A written employment contract should be concluded within one month after work begins. Failure can create double-wage exposure, and continued employment without a written contract can eventually lead to an open-ended relationship under the statutory framework. Keep a signed copy and reliable delivery evidence.
Expiry is not early termination
A fixed-term contract ordinarily ends when its term expires, but early termination still requires a statutory basis and procedure. A clause allowing either side to terminate at will before expiry cannot displace mandatory protections.
Calendar the expiry date and start review early enough to assess performance, headcount, protected status, renewal rights, notices and compensation. Continuing work after expiry without clear documentation creates avoidable uncertainty.
Renewal and open-ended contracts
An employee may be entitled to an open-ended contract after ten consecutive years with the employer, in specified restructuring circumstances, or after two consecutive fixed-term contracts when the statutory conditions are met and the employee requests or agrees to renewal. The precise treatment of the second renewal and local adjudication should be checked before action.
An open-ended contract is not permanent employment. It can end on a lawful statutory ground, but not merely because a date arrives.
Compensation when a term expires
Economic compensation is generally due when a fixed-term contract expires, except where the employer offers renewal on the same or better conditions and the employee refuses. Calculation normally uses years of service and the employee's monthly wage, subject to statutory caps and special rules.
Document the renewal offer, terms, delivery, response and reason employment ended. A vague oral offer is difficult to prove.
Protected situations
Expiry may need to be extended where statutory protection applies, including certain medical-treatment, occupational-disease, work-injury, pregnancy, maternity or nursing situations and some long-service employees approaching retirement. Do not process expiry from a calendar report without a protected-status check.
Evidence and process checklist
- Signed contract and amendments.
- Start date, service history and prior fixed terms.
- Expiry calendar with an early review trigger.
- Performance and disciplinary records where relevant.
- Protected-status and leave review.
- Written renewal offer and proof of delivery.
- Employee response and exit documentation.
- Compensation calculation and payment record.
- Handover, confidentiality and post-employment obligations.
Common mistakes
- Using expiry language to disguise an early dismissal.
- Automatically issuing a third fixed term without checking open-ended rights.
- Assuming no compensation is due because the date expired.
- Allowing work to continue after expiry without a signed renewal.
- Ignoring pregnancy, medical-treatment, work-injury or retirement-proximity protections.
- Failing to preserve the terms of a renewal offer.
Primary sources and review date
- Labor Contract Law, contract formation and termination provisions
- Labor Contract Law, economic-compensation provisions
- Ministry of Human Resources and Social Security official Chinese text
Reviewed 8 September 2026. General information only; local interpretation, service history and protected status require fact-specific review.
