New Guideline: How to Conclude an Electronic Labor Contract in China

Theoretically an electronic labor contract duly signed in compliance with the Labor Contract Law (effective on January 1, 2008) and the Electronic Signatures Law (effective on April 1, 2005) is valid and legally binding on contracting parties. However, not until the breakout of COVID-19 pandemic have Chinese governments and courts officially confirmed the validity of electronic labor contracts in China. The Ministry of Human Resources and Social Security (“MHRSS”) for the first time acknowledged the legitimacy of electronic labor contracts in its response letter to the enquiry from Beijing human resources and social security authority in March 2020, one of its efforts to deal with labor management in such emergency situations.

On July 1, 2021, MHRSS released a Guideline for the Conclusion of Electronic Labor Contracts, providing instructions to employers and employees on how to conclude electronic labor contracts properly and clarifying obligations that employers and those electronic contract management platforms should perform, respectively, prior to, during and after the conclusion. 

1. Pre-conclusion obligations

(1) Employer to obtain employees’ informed consents

Before concluding any electronic labor contract, an employer is obligated to explicitly inform, free of charge, its employees of the procedures, operating methods, precautions and channels to view and download full copy of the concluded labor contracts.

(2) Employer to select a qualified platform

■ Employer and its employees must conclude their electronic labor contracts through a qualified electronic contract management platform (the “Platform”).

■ The Platform can be self-built, purchased from a third party vendor, or provided by the government.

■ The Platform can be deemed qualified if:

- it enables users to sign, access, store, and use the electronic labor contracts;

- it is able to verify the identity of the parties to the contract, apply the electronic signatures, confirm the intention of the parties, and ensure the data security;

- it can ensure that the conclusion, generation, transmission, and storage of the electronic labor contracts comply with relevant laws and regulations; and

- it can ensure that the electronic labor contracts are authentic, complete, accurate, tamper-proof, and traceable.

■ There are commercial platforms and local-government-sponsored platforms available in the market. Employers may select one pursuant to the above qualifications and local practice (for example, it may consider which type of platforms is more acceptable to local labor dispute arbitration tribunals or courts).

(3) Employer to ensure electronic labor contracts include all must-have clauses, no matter it utilizes government-recommended version or its own template.

2. Process of concluding electronic labor contracts

(1) Employer and its employees submit their authentic, complete and accurate identity information to the Platform.

(2) The Platform verifies the identity and true willingness and intention of the contracting parties through various technical measures, such as digital certificate, networked information verification, biometric identification verification, and mobile short message verification code, and records and retains the whole verification and confirmation process (it may also use electronic social security card to conduct real-name authentication).

(3) Employer and its employees use reliable electronic signatures to sign the electronic labor contracts while for purpose of obtaining a reliable electronic signature:

■ the parties use the “digital certificate” and “key” issued by the legally established electronic authentication service agency in compliance with the Electronic Signatures Law to electronically sign the labor contracts; and

■ each of the electronic labor contracts is affixed with a credible timestamp.

(4) Employer notifies its employees of the conclusion of electronic labor contracts by mobile phone text message, WeChat, e-mail or APP message prompt or other means.

3. Post-conclusion obligations

(1) Employer has the following post-conclusion obligations:

■ It should remind its employees to download and safely keep, in a timely manner, the text of electronic labor contracts;

■ It should inform its employees of means and channels to view and download electronic labor contracts and provide necessary guidance and assistance;

■ It should ensure that its employees may view, download, and print out the complete contents of electronic labor contracts at any time by using the common equipment free of charge;

■ It should, upon request, make available to its employees at least one hard copy of electronic labor contracts free of charge and certify the consistency with the original electronic data; and

■ It should retain the electronic labor contracts for a period of no less than two years after the employment is terminated;

(2) The Platform has the following post-conclusion obligations:

■ It should retain the evidence for the whole process of conclusion and management of electronic labor contracts, including identity authentication, signing intention, electronic signatures, etc., ensuring the integrity of the electronic evidence chain;

■ It should make sure that the relevant information is searchable and accessible, and provide convenience to employers, their employees and institutions authorized by the laws and regulations when searching and accessing electronic data; and

■ It should establish information protection system for electronic labor contracts and abide by the laws and regulations in respect of cybersecurity, right of privacy and personal information protection.