With the characteristics of low salary and relaxed legal regulations, the employment of interns are becoming more and more popular with companies. The employment of interns not only helps the company find new talent, but also reduces labor costs.
With the development of international exchanges and cooperation, foreign interns, as well as domestic ones, are readily available. However, it is critical to note that the taking-on of interns is not 100 % risk-free. On the basis of existing related policies, this passage will give you some suggestions on "How to Hire Foreign Interns Legally" combined with a real case concerning the illegal employment of foreign intern by a company.
In April 2014, A (a foreign student studying in a foreign university) and Company B agreed on a short-term internship in Company B.
Company B issued the "Invitation Letter" and a "Invitation Letter of Guarantee", with which A successfully applied for an X2 visa (X2 visa: issued to those who apply for short-term study in China). She subsequently travelled to China for the internship. However, there was no internship agreement between the parties.
During the internship, Company B undertook the cost of rent and round-trip tickets for A, and provided internship allowance to cover A's commute and meals (around 1000RMB). In September 2014, the local public security organ investigated and confirmed the illegal employment of foreigners by Company B, and gave Company B the corresponding administrative penalty.
Opinion of the Company
Company B thought public security organ's determination of face was wrong, arguing that there was no employment relationship between the parties, thus were not guilty of employing foreigners illegally.
In Company B's opinion, A was a student, whose time at Company B was part of her studies, as opposed to actual work. Notwithstanding, they also argued that it would have been impossible for the embassy to issue the X2 visa to A, according to the "Invitation Letter" and the "Invitation Letter of Guarantee" provided, if the purpose of A's time at Company B was to work.
Furthermore, Company B did not consider A was one of its s staff and accordingly, did pay a salary. The 1000RMB A received monthly was an internship allowance, rather than salary, Company B making this assertion according to the fact that, if the money was to be regarded as a salary, it is much lower than the minimum wage standard required by Shanghai regulations.
Judgement of the Court
The court: According to Article 41 "Exit and Entry Administration Law of the People's Republic of China", Foreigners who work in China shall obtain work permits and work-type residence permits in accordance with relevant regulations. No entities or individuals shall employ foreigners who have no work permits or work-type residence permits. Article 43: Any of the following acts of foreigners shall be deemed unlawful employment: (1) Work in China without obtaining work permits or work-type residence permits in accordance with relevant regulations.
Despite the fact that A was not in possession of a work permit and a work-type residence permit, Company B still hired A for work with a paying salary, reimbursement of rent and round-trip tickets. This can be regarded as a factual labor relationship, and the payment type or amount have nothing to do with the judgement of illegal employment. Therefore, the administrative penalty made by the public security organ for the illegal employment of foreigners by Company B is clear and correct.
Although this case belongs to administrative litigation, it clearly presents the attitude of the court towards the employment of foreign interns. In the court's opinion, a domestic "internship" (in China) by foreign students studying at a foreign university on a short-term student visa is regarded as illegal employment. Therefore, companies should avoid the risk of illegal employment when hiring foreign interns.
The following paragraphs focus on the current policies of foreign intern employment. The current types of foreign interns mainly include: (1) foreign students studying in domestic universities. (2) foreign students studying in foreign universities.
1. Foreign Students Studying in Domestic Universities.
According to the Article 22, "Regulations of the People's Republic of China on Administration of the Entry and Exit of Foreigners", where a foreigner holding a residence permit for study intends to engage in off-campus work-study or internship, he or she shall, upon the approval of the school, apply to the exit and entry administration authority of the public security organ to have such information as the location and duration of the work-study program or internship placement specified in his or her residence permit. A foreigner holding a residence permit for study shall not engage in any off-campus work-study or internship unless the information prescribed in the preceding paragraph is specified in his or her residence permit.
It can be seen that the current law does not prohibit companies from hiring foreign students studying in domestic universities, but there are three pre-conditions: (1) the intern is a student in domestic university who has not yet graduated; (2) the internship should be approved by the university; (3) the intern shall have such information as the location and duration of the work-study program or internship placement specified in his or her residence permit.
2. Foreign Students Studying in Foreign Universities
As presented in the case, the previous policy didn't allow companies to hire foreign students studying in foreign universities. But for the moment, there is flexibility in some regions on this issue.
a) Regulations of Beijing
On March 1st, 2016, "20 Policies of Entry and Exit" came into effect, developed by the Ministry of Public Security in support of Beijing's innovation and development, ?relating to foreigner visas, entry & exit, visits & residence etc. According to the current policies, if a company in Zhongguancun, recorded in the entry and exit department of Beijing Public Security Organ, wants to invite foreign students studying in foreign universities for a domestic internship, the foreign students can apply for a short-term private affairs visa (specified with "internship") for a domestic internship at the visa-issuing port authority. For those who possess other types of visa, he/she can also change the visa type into a 'short-term private affairs' (specified with "internship") for the internship, after entry.
In March 2016, the "20 Policies of Entry and Exit" were only implemented in Zhongguancun. In May 2017, the Chaoyang District and Shunyi District have also launched the "New Ten Articles" for the "Entry and Exit Reform of Foreign Talents" in the Demonstration Zone of Beijing Service Industry. Thus, a set of internship regulations for foreign students studying in foreign universities (implemented in Zhongguancun, Chaoyang District and Shunyi District.) was established within Beijing
b) Regulations of Shanghai
On December 9th 2016, the "New Ten Articles" of entry and exit policies came into effect, regarding the support for the construction of the Shanghai Technology Innovation Center by the Ministry of Public Security. According to the "New Ten Articles", if foreign students studying in foreign universities are invited to undertake an internship by enterprises and public institutions in Shanghai, the foreign students can apply for a short-term private affairs visa (specified with "internship") for domestic internships through a Shanghai visa-issuing authority. For those who possess visa of other types, he/she can also change the visa type into a short-term private affairs (specified with "internship") for the internship after entry.
c) Regulations of the Ministry of Public Security
In 2017, the Ministry of Public Security also selected 7 policies of entry and exit with high actual demands and good social responses to implement in related national free trade zones and comprehensive innovation and reform demonstration zones, fully supporting the construction and development of regional economy and society. Related regions include: free trade zones of Tianjin, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan and Shaanxi; comprehensive innovation and reform demonstration zones of Beijing-Tianjin-Hebei Region, Anhui Province, Guangdong Province, Sichuan Province, Shenyang, Wuhan and Xi'an.
Among the 7 policies promulgated by the Ministry of Public Security, the internship regulations for foreign students studying in foreign universities are basically the same as those in Beijing and Shanghai. The difference with this set of policies is that the companies should be recorded in the entry and exit management department of the provincial public security organ.
Advice from the lawyer
The good management of foreign interns is beneficial for international promotion and market efficiency. The aforementioned policies and measures offer companies a variety of choices regarding the employment of interns, while companies should still be aware of the risks. In order to avoid the risks, the following steps are necessary:
First, the company should strictly review the qualifications of foreign interns and be aware of illegal employment. As mentioned above, for foreign interns studying in domestic universities, it is necessary to review whether their study-type residence visas are specified with information such as location and duration of work-study or internship placement; For foreign interns studying in foreign universities, it is necessary to review whether they possess short-term private affairs visa specified with "internship". In addition, it is necessary to review whether the intern is a full-time student, because students who are studying part-time, such as a correspondence education, are excluded from the scope of 'intern'.
Second, the company should sign an internship agreement with the foreign intern. According to the Article 29 of Administrative Measures for Work-study Program of Students in the University, if a student engages in an off-campus work-study program, the company shall sign an "internship agreement" with the intern. The signing of internship agreement not only clarifies that the company provides internship opportunities rather than employment opportunities, but also reduces the risk of affirmation for a factual labor relationship.
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