1. Identify what is changing before issuing instructions
Map the entities using their registered names, not the group brand. Record the contract signatory, actual supervisor, attendance approver, payroll payer, social-insurance contributor and place of work. For a temporary assignment, document its duration, duties, reporting authority, pay and benefits, return arrangements and the employer obligations that continue. An internal cost recharge is not, by itself, an employee agreement to change employer.
A shareholder or company-name change alone does not disrupt performance under Labor Contract Law Article 33. A merger or division instead engages Article 34: the original contract remains effective and is performed by the entity succeeding to the rights and obligations. These situations differ from an ordinary move between existing affiliates. For agreed changes to contractual terms, Article 35 requires a written amendment and a copy for each party. A headquarters email should not be treated as a substitute for the necessary employee agreement.
2. Apply the written-contract and actual-management rules separately
Article 3 of the SPC Interpretation (II) on labor disputes, effective 1 September 2025, addresses employees used alternately or simultaneously by related entities. Where a written labor contract exists and the employee asks the court to recognize the employment relationship under it, the court supports that request according to law. Without a written labor contract, the court assesses management conduct together with working time, job content, remuneration payments and social-insurance contributions.
In the no-written-contract situation covered by Article 3(1)(2), the court also supports an employee request that the relevant affiliates jointly bear remuneration, welfare and related responsibilities. The stated exception is a lawful agreement between those affiliates on remuneration, welfare and related matters that the employee has consented to. Group membership alone is not the full test, and a private allocation between companies without employee consent does not satisfy that exception.
3. Check service credit and contract history before resetting records
Implementing Regulation Article 10 carries prior service forward when an employee is arranged to move to a new employer for reasons not attributable to the employee. If the former employer has already paid statutory economic compensation, those former years are not counted again when the new employer later calculates economic compensation for a lawful termination or expiry. Identify the payment basis and receipt; an unexplained transfer payment is not proof that this exception applies.
SPC Interpretation (I), Article 46, further addresses combined service for economic compensation or damages where the former employer paid no economic compensation and the employee terminates under Article 38, or the new employer proposes termination or expiry. Its listed transfer situations include an organizational assignment and affiliates taking turns signing contracts. Separately, Interpretation (II), Article 10(3), counts the specified employer-switch arrangement toward two consecutive fixed-term contracts when the employee remains at the original workplace and post for reasons not attributable to the employee, the original employer continues management, and the contract expires. A new entity name is not a reliable reset of service or renewal obligations.
4. Put the employment arrangement into an executable document
For an intended employer change, review a document signed by the employee and both entities that identifies the effective date, the treatment of the old relationship, the new contract, carried-forward service, accrued wages and leave, benefits, and responsibility for outstanding claims. If the chosen route ends the old relationship by agreement, separately assess Articles 36 and 46(2): an employer-proposed agreed termination engages economic-compensation obligations. Describe the real initiator; do not manufacture an employee resignation to disguise a group-directed move.
For a temporary secondment, specify who can approve leave, overtime, discipline and a return to the original role. Keep the employee-facing terms consistent with the intercompany agreement and actual practice. Review social-insurance administration, tax, permits where relevant, and any labor-dispatch classification separately. The word secondment does not itself resolve those issues or permit contracting out of mandatory employment rights.
5. Assemble the file before payroll or management switches
Prepare the existing and previous contracts, entity registration details, proposed assignment or transfer agreement, job and reporting charts, attendance and approval records, payroll and bank records, social-insurance history, service calculations and any earlier compensation receipts. Add the employee’s responses and a side-by-side statement of existing and proposed terms. Resolve contradictory records before changing systems, rather than backdating consent after the move.
The decision should state whether the original employment continues, a lawful succession applies, or an agreed employer change is being implemented, and who will perform each obligation. If facts already differ from the paperwork, obtain a case-specific assessment before making a termination or repayment demand. For an initial consultation, provide a non-confidential outline of the two entities, cities, proposed date and actual management pattern; arrange secure review of personnel documents afterwards.
Legal sources
Official sources · Checked 2026-10-08. Translations are for reference and are not official legal texts.
- PRC Labor Contract Law (2012 amendment) ↗
Articles 33–36 and 46(2): continuity, agreed changes and employer-proposed agreed termination.
- SPC Interpretation (II) on Labor Disputes, Fa Shi [2025] No. 12 ↗
Articles 3, 10(3) and 21: related-entity employment, the specific contract-counting rule and commencement.
- Implementing Regulation of the PRC Labor Contract Law, State Council Order No. 535 ↗
Article 10: service carried forward and avoiding double-counting compensated service for later economic compensation.
- SPC Interpretation (I) on Labor Disputes, Fa Shi [2020] No. 26 ↗
Article 46: circumstances and triggers for combining service for compensation or damages.
General information about mainland China. The facts, applicable dates and local rules require individual review.
Partner, Beijing ChangAn Law Firm
China-qualified since 2019 · Beijing & Shenzhen
Review a China group transfer or secondment
Check the employing entity, employee agreement, service credit and allocation of duties before changing the employment arrangement.
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