Contractor or employee in China: the three tests
The short answer
Chinese labor law does not sort workers into employees and contractors. It asks whether a labor relationship exists. Under a 2005 notice, one exists without a written contract when the worker is subject to your rules and management and does paid work you arrange, and that work is part of your business. People who freelance on their own terms are governed by civil law, not labor law.
The three-test self-check
| Test (2005 notice, art. 1) | Chinese original | Signs in your project that point to employment |
|---|---|---|
| (1) Both sides have the legal standing of employer and worker | 用人单位和劳动者符合法律、法规规定的主体资格 | Usually met when a registered company works with an adult. The notice does not say how a company abroad with no entity in China counts |
| (2) Your rules and management apply, and the worker does paid work you arrange | 用人单位依法制定的各项劳动规章制度适用于劳动者，劳动者受用人单位的劳动管理，从事用人单位安排的有报酬的劳动 | Fixed hours, attendance, your staff handbook, tasks handed out day by day, a manager who approves leave |
| (3) The work is part of your business | 劳动者提供的劳动是用人单位业务的组成部分 | A permanent seat in a team doing your core work, no end date, no deliverable |
All three must hold for a labor relationship to exist without a written contract. English rendering ours.
Most projects with a freelancer in China pass the first test without anyone giving it a thought. The second and third are where an engagement drifts. A designer who delivers a packaging set against a brief sits far from both. A developer who logs on at nine, takes tickets from your team lead and has worked on your product for two years with no end date sits close to both.
Take a made-up but familiar case. A company hires a freelance developer in Chengdu to build one integration, priced as three milestones. The integration ships. The developer is asked to stay on “for support,” and the fee becomes a monthly one. By the second year, they join the daily stand-up, ask the team lead before taking a week off and fix whatever lands in the queue. No one reopened the services agreement, though by then it described a different job.
The right-hand column works like a row of warning lights. One light on its own may mean little. Several together start to describe a job.
Run the check again whenever an engagement is renewed, or when the fee changes from per milestone to per month. In the Chengdu example, that switch was the earliest warning.
The five texts that draw the line
The test comes from a notice the Ministry of Labor and Social Security, as it then was, sent to provincial labor departments on May 25, 2005. Article 1 holds the three tests and article 2 the evidence. Each text below is quoted in full in Chinese, so a lawyer or a colleague who reads Chinese can check our English against it.
用人单位招用劳动者未订立书面劳动合同，但同时具备下列情形的，劳动关系成立。(一)用人单位和劳动者符合法律、法规规定的主体资格；(二)用人单位依法制定的各项劳动规章制度适用于劳动者，劳动者受用人单位的劳动管理，从事用人单位安排的有报酬的劳动；(三)劳动者提供的劳动是用人单位业务的组成部分。
Where an employing unit hires a worker without concluding a written labor contract, a labor relationship is established when all of the following hold at the same time: (1) the employing unit and the worker have the legal standing required by laws and regulations; (2) the labor rules the employing unit has lawfully made apply to the worker, and the worker is subject to the employing unit’s labor management and does paid work the employing unit arranges; (3) the work the worker provides is part of the employing unit’s business. (Our translation.)
用人单位未与劳动者签订劳动合同，认定双方存在劳动关系时可参照下列凭证：(一)工资支付凭证或记录(职工工资发放花名册)、缴纳各项社会保险费的记录；(二)用人单位向劳动者发放的“工作证”、“服务证”等能够证明身份的证件；(三)劳动者填写的用人单位招工招聘“登记表”、“报名表”等招用记录；(四)考勤记录；(五)其他劳动者的证言等。其中，(一)、(三)、(四)项的有关凭证由用人单位负举证责任。
Where an employing unit has not signed a labor contract with a worker, the following documents may be consulted in finding whether a labor relationship exists: (1) wage payment vouchers or records (payroll rosters) and records of social insurance contributions; (2) a “work ID,” “service ID” or similar document issued by the employing unit that proves identity; (3) recruitment records such as a “registration form” or “application form” the worker filled in for the employing unit; (4) attendance records; (5) testimony of other workers, and so on. The employing unit bears the burden of proof for the documents in items (1), (3) and (4). (Our translation.)
Read the last sentence of article 2 twice. In a dispute, the company, not the worker, has to produce the pay, recruitment and attendance records.
A company abroad rarely issues payroll rosters or work badges. Ordinary remote-work habits still leave a trail that looks a lot like the list:
| Item in article 2 | What can resemble it in a remote engagement |
|---|---|
| Wage records | The same transfer on the same day every month, with no invoice or deliverable attached |
| A work ID | A company email address, a staff profile in your directory, a title on your website |
| Recruitment forms | An employee onboarding form, a staff contract template signed as a “services agreement” |
| Attendance records | Time-tracking logs, required check-ins, a shared calendar that blocks out fixed hours |
| Testimony of other workers | Your own staff, who worked beside the person every day |
No single item settles anything. Put together, they make the kind of file article 2 describes. Article 5 of the same notice says where a dispute starts: a worker who disputes whether a labor relationship exists may apply to the labor dispute arbitration commission with jurisdiction. That commission is the “tribunal” on this page.
Article 3 covers what follows once the three tests are met. The employer signs a labor contract after the fact, with a term the two sides agree. If they can’t agree, either side may end the relationship, and an employer that ends it pays one month’s wage for each full year the person worked.
Sixteen years later, the line was drawn from the other side. Guidance issued in July 2021 by the human resources ministry and seven other national bodies, the Supreme People’s Court among them, covers workers in new forms of employment. It sets out three tiers: a full labor relationship; a middle tier, where a company manages the worker without every test being met; and self-directed work, which civil law governs.
符合确立劳动关系情形的，企业应当依法与劳动者订立劳动合同。不完全符合确立劳动关系情形但企业对劳动者进行劳动管理（以下简称不完全符合确立劳动关系情形）的，指导企业与劳动者订立书面协议，合理确定企业与劳动者的权利义务。个人依托平台自主开展经营活动、从事自由职业等，按照民事法律调整双方的权利义务。
Where the circumstances for establishing a labor relationship are met, the enterprise shall conclude a labor contract with the worker according to law. Where they are not fully met but the enterprise exercises labor management over the worker (hereinafter “not fully meeting the circumstances for establishing a labor relationship”), enterprises are guided to conclude written agreements with workers that reasonably set the rights and obligations of both sides. Where individuals rely on a platform to run business activities on their own or to work as freelancers, the rights and obligations of both sides are governed by civil law. (Our translation.)
The words “rely on a platform” matter. The guidance was written for platform work, and its opening paragraph names delivery riders, ride-hailing drivers, truck drivers and internet marketers. It describes the self-directed freelancer clearly. It says nothing about a company abroad that engages one directly.
That is the theory. The money question starts in the Labor Contract Law. Once a labor relationship exists, article 10 requires a written contract, and article 82 puts a price on the missing one.
用人单位自用工之日起超过一个月不满一年未与劳动者订立书面劳动合同的，应当向劳动者每月支付二倍的工资。
Where an employing unit, more than one month but less than one year after it began using a worker’s labor, has not concluded a written labor contract with the worker, it shall pay the worker twice the wage each month. (Our translation.)
A services agreement is not a labor contract. So if a tribunal finds that a long engagement was employment all along, the double wage is one of the obvious claims on the table. The State Council’s implementing regulations then say what happens at the one-year mark.
用人单位自用工之日起满一年未与劳动者订立书面劳动合同的，自用工之日起满一个月的次日至满一年的前一日应当依照劳动合同法第八十二条的规定向劳动者每月支付两倍的工资，并视为自用工之日起满一年的当日已经与劳动者订立无固定期限劳动合同，应当立即与劳动者补订书面劳动合同。
Where an employing unit has not concluded a written labor contract with a worker one full year after it began using the worker’s labor, it shall pay the worker twice the wage each month, under article 82 of the Labor Contract Law, from the day after the first full month to the day before the full year, and it is deemed to have concluded an open-ended labor contract with the worker on the day the full year is reached; it shall immediately conclude a written labor contract with the worker. (Our translation.)
Put in numbers, with figures invented for the example: a freelancer paid 20,000 yuan a month for 18 months, found to have been an employee from the first day, could claim the double wage for the eleven months from the day after month one to the day before month twelve. If the fees already paid count as the base wage, the extra claim is up to 220,000 yuan. From month twelve, the law treats the two sides as bound by an open-ended labor contract. The arithmetic is ours; a tribunal decides what counts as the wage.
What the courts look at
A dispute over whether a labor relationship exists starts at the arbitration commission (notice, article 5). For how judges weigh the facts, the most recent text is the Supreme People’s Court’s second interpretation on labor disputes, 法释〔2025〕12号, issued on July 31, 2025 and in force since September 1, 2025. Article 3 deals with a worker used by several affiliated companies at once or in turn. Where none of them signed a written labor contract, the court decides by employment management conduct, and weighs working hours, work content, pay and social insurance alongside it.
劳动者被多个存在关联关系的单位交替或者同时用工，其请求确认劳动关系的，人民法院按照下列情形分别处理：（一）已订立书面劳动合同，劳动者请求按照劳动合同确认劳动关系的，人民法院依法予以支持；（二）未订立书面劳动合同的，根据用工管理行为，综合考虑工作时间、工作内容、劳动报酬支付、社会保险费缴纳等因素确认劳动关系。
Where a worker is used alternately or at the same time by several affiliated units and asks the court to confirm a labor relationship, the people’s court proceeds as follows: (1) where a written labor contract has been concluded and the worker asks the court to confirm the labor relationship under it, the court supports the request according to law; (2) where no written labor contract has been concluded, the court confirms the labor relationship on the basis of employment management conduct, taking into account working hours, work content, payment of remuneration, payment of social insurance contributions and other factors. (Our translation.)
Chen Yifang, who heads the court’s First Civil Division, explained the rule in an article the court published on October 16, 2025. The article’s summary for affiliated companies with no written contract: look mainly at management conduct, and consider the other factors with it. The rule was written for groups of companies. For a client abroad, it shows what the court weighs first in that setting, and it goes no further.
Three more articles bear on a freelance engagement. Article 6 says the double wage is counted month by month. Article 19 says an agreement between employer and worker that no social insurance is due, or a worker’s promise not to claim it, is void. And article 5 lets a lawfully established representative office of a foreign enterprise be a party to a labor dispute, and lets a party ask the court to add the foreign enterprise itself.
The 2026 draft on new forms of work
Everything in this section describes a draft, and the draft is not in force. On October 8, 2026, the human resources ministry published draft measures on protecting the rights of workers in new forms of employment, open for comment until November 8, 2026. According to Xinhua’s report, the draft does not apply to people who run their own business or freelance through an internet platform. The same report says the draft would bar platform companies from evading their duties as an employer by, among other things, inducing workers to register as sole traders (个体工商户).
When the final text is published, this section will be rewritten from it, with its article numbers and its effective date.
Keeping a project a project
Four signs keep an engagement on the project side of the line:
- Defined deliverables. The contract names what you receive and leaves the hours to the freelancer.
- Milestones with acceptance. Each payment is tied to a result you check and accept, the way a sourcing job splits into paid milestones.
- No attendance and no set hours. You don’t clock the person in, set their working day or apply your staff handbook.
- No place in your org chart. They don’t report to a line manager, manage your staff or fill a standing role.
These are signs, not a safe harbor. If the work is ongoing, managed day to day and part of your core team, the honest route is an employee, through your own entity or an employer of record.
If you are unsure which side of the line you are on, the employee-or-freelancer check walks through the choice question by question. If you are staying on the project side, the handbook’s chapter on contracting turns the four signs into clauses, and a services agreement checklist built for China lets you review a draft clause by clause. The overview, How to hire a freelancer in China without speaking Chinese, covers the rest of the job. For a specific set-up, a PRC lawyer is the person to ask.
What the 2005 notice leaves open
- The notice addresses employing units (用人单位), and the Labor Contract Law defines those as enterprises and other organizations inside China (article 2); neither text says how a company abroad with no entity in China is treated.
- No text read for this page bans a company abroad from contracting a person in China for a project.
- None of those texts sets a maximum length for a project engagement.
- None says that a written services agreement, on its own, prevents a labor relationship from being found; the facts decide.
- The 2026 draft is not law.
Paying a freelancer from abroad raises separate questions of currency and tax, covered in the handbook’s chapter on paying.
On ChinaTalentDesk, you fund one milestone at a time and approve each deliverable against its criteria, as How it works explains. The talent categories show the kinds of work freelancers bid on. Write the work as deliverables and milestones from the first brief. Start a brief.
Questions buyers ask
Is it legal to hire an independent contractor in China?
It can be. No text we read bans a company from contracting a person in China for a project, and the 2021 guidance puts people who freelance through a platform under civil law. But the label does not decide it. If the person works under your rules and management, on paid work you arrange, as part of your business, a tribunal can find a labor relationship whatever the contract says.
What makes a contractor an employee in China?
The facts of the work. A 2005 labor ministry notice says a labor relationship exists without a written contract when three tests all hold: both sides have legal standing; the worker is subject to your rules and management and does paid work you arrange; and the work is part of your business. Tribunals look at pay records, ID badges, recruitment forms, attendance and testimony.
What happens if a contractor in China is found to be an employee?
On the texts this page quotes, labor law then applies from the start of the work. Under the Labor Contract Law, an employer that goes more than one month without a written labor contract owes twice the monthly wage for each month after that, within the first year, and after a full year an open-ended labor contract is deemed to exist. The 2005 notice says a contract must then be signed, and that an employer ending the relationship pays one month’s wage for each full year worked. An agreement that no social insurance is due is void.
Does a foreign company need a Chinese entity to work with a freelancer?
Not for project work, on the texts we read. They contain no rule requiring an entity to contract a freelancer for defined deliverables. They also do not say how a company abroad with no entity is treated if the work turns into employment. Paying across the border raises separate questions of currency and tax.
Sources
- Notice on Matters Concerning the Establishment of Labor Relations, 劳社部发〔2005〕12号 (official copy, Xuchang Human Resources and Social Security Bureau), checked October 18, 2026
- Guiding Opinions on Protecting the Labor Rights of Workers in New Forms of Employment, 人社部发〔2021〕56号 (gov.cn), checked October 18, 2026
- Labor Contract Law of the PRC, arts. 2, 10 and 82 (National Database of Laws and Regulations), checked October 18, 2026
- Implementing Regulations of the Labor Contract Law of the PRC, art. 7 (National Database of Laws and Regulations), checked October 18, 2026
- Supreme People’s Court, Interpretation (II) on the Application of Law in Labor Dispute Cases, 法释〔2025〕12号, checked October 18, 2026
- Supreme People’s Court, Chen Yifang on Interpretation (II), October 16, 2025, checked October 18, 2026
- Xinhua, report on the MOHRSS draft measures on new forms of employment, October 8, 2026, checked October 18, 2026