How to Set Up Probation Periods Under China Labor Law: 2026 Guide for Foreign Companies

Under China’s Labor Contract Law (劳动合同法, láodòng hétóng fǎ), probation periods (试用期, shìyòng qī) for foreign-invested enterprises (FIEs) are strictly capped at 6 months—but only for contracts of 3+ years. For contracts between 1 and 3 years, the maximum is 2 months; for contracts under 1 year, the limit is 1 month. These fixed legal boundaries, combined with a 80% minimum pay floor and mandatory Day 1 social insurance enrollment, make China’s probation rules distinct from global norms. This 2026 guide provides a practical, data-backed framework for foreign executives to design compliant probation periods that protect the company while evaluating talent.

1. Legal Framework: Matching Probation to Your Contract Duration

Article 19 of the Labor Contract Law mandates a hard link between contract length and probation duration. A common mistake among foreign managers is assuming a 6-month probation can be applied to a standard 2-year contract. In China, any probation exceeding the statutory cap is void—the employee is automatically converted to a full-time regular employee from Day 1, and the company may owe back pay for the wage difference.

The table below summarizes the maximum permissible probation periods for different contract types. Note that probation is strictly prohibited for task-based contracts (以完成一定工作任务为期限的劳动合同, yǐ wánchéng yīdìng gōngzuò rènwù wéi qīxiàn de láodòng hétóng) and short-term contracts under 3 months.

2. The “No Extension” Rule and Re-Probation Prohibition

Once a probation period ends, it cannot be extended—even if both parties agree. China’s labor courts consider any attempt to extend probation beyond the legal limit as a second violation. Similarly, if a foreign company terminates a probation employee and later re-hires them, a new probation period is generally prohibited unless the role and responsibilities are fundamentally different.

Decision Framework: If your assessment for a mid-level specialist role requires more than 2 months of evaluation, choose a 3-year fixed-term or open-ended contract (allowing a full 6-month probation). If you are hiring for a short-term project (e.g., 6 months), avoid setting a probation period altogether—use a task-based contract instead.

3. Probation Pay: The 80% Rule and Social Insurance (社保)

Article 20 of the Labor Contract Law states that probation wages cannot be less than 80% of the agreed-upon post-probation salary or the local minimum wage—whichever is higher. For example, if a Shanghai-based engineer has a post-probation salary of RMB 25,000, their probation pay cannot drop below RMB 20,000.

Critically, social insurance (社保, shèbǎo) must be paid from Day 1 of probation. There is no “waiting period” common in many foreign jurisdictions. Failure to enroll an employee during probation constitutes a serious labor law violation, exposing the company to retroactive contributions, late fees (0.05% per day), and administrative fines up to 3x the unpaid amount.

4. Critical Nuance: Internships (实习期) vs. Probation (试用期)

Foreign companies often confuse “internship” (实习期, shíxí qī) with probation. Internships apply to students who have not yet graduated—they are governed by agreements with their educational institutions, not the Labor Contract Law. Probation applies exclusively to formal employees who have signed a labor contract. Treating an intern as a probationary employee without a proper contract is a dangerous loophole that can lead to double wage claims.

If you hire a graduate student before they receive their diploma, they are an intern. Once they graduate and sign a formal contract, they enter probation. The two periods cannot overlap or substitute for each other.

5. Termination During Probation: The “Proved” Burden of Proof

Under Article 39, an employer can terminate a probation employee only if they “prove to be unsuitable” (被证明不符合录用条件, bèi zhèngmíng bù fúhé lùyòng tiáojiàn). The burden of proof is entirely on the employer. This means you need documented, objective criteria—a pre-defined “employment conditions” (录用条件, lùyòng tiáojiàn) list—signed by the employee at the start of probation.

Commonly accepted termination grounds during probation:

• Failure to achieve clearly defined 30/60/90-day KPIs.
• Misrepresentation of qualifications or background.
• Serious violation of company policies documented in Chinese.

Without these documents, termination during probation is effectively an unfair dismissal, triggering severance of 2N (twice the statutory severance) plus possible reinstatement.

6. 2026 Best Practices for Foreign Companies

China’s labor courts are increasingly scrutinizing probation practices, especially after the 2023 labor dispute statistics showed a 15% year-over-year increase in probation-related cases. To stay compliant in 2026, foreign companies should adopt the following best practices:

1. Draft Clear Employment Conditions (录用条件): Pre-define specific, measurable, and objective criteria for the role. Translate them into Chinese and have the employee sign them alongside their labor contract.
2. Sign the Contract Before Work Commences: If an employee works for even one day without a signed contract, the probation period is void. The law requires a written contract signed before the start of work.
3. Conduct Structured Probation Reviews: Conduct formal reviews at 30, 60, and 90 days. Document any performance gaps in writing and allow the employee to respond. This creates an audit trail for termination if needed.
4. Avoid Collective Probation Clauses: Do not include blanket probation terms in collective contracts. Each individual labor contract must explicitly state the probation duration and conditions.

Summary Table: Probation vs. Post-Probation Rights

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