Contracts
Contractual agreements do not have the same weight or meaning in China as they do in the West. Whereas contracts are viewed as static and binding agreements in the West, in China, they are typically treated as a starting point for ongoing, often impromptu, negotiations and amendments. This should not be interpreted to mean that one’s contract is unimportant or inconsequential: To the contrary, the contract should be taken seriously precisely because it often serves as the starting point for future negotiations, as well as the basis for resolving, if not preempting, potential disputes or your employer’s attempts at last minute changes.

Official SAFEA Contract and Addendum
If you are working legally in China, you will normally sign two sets of two different contracts. One contract is the official SAFEA contract (also available as a PDF file) and the other contract is the SAFEA contract addendum.

SAFEA contracts come in paired numbered sets. On the upper right-hand corner you will notice a unique red identification number (usually seven digits). One version of the paired set starts in English and the other in Chinese. You will sign two official SAFEA contracts with the same identification number. One is for the school and one is for your records (typically you will receive the version that starts in English). The contracts are identical except for the order of the language.

The local governmental officials usually keep tight control of these contracts. If you are asked to sign a contract that is not authentic (does not have a red number on the right upper corner and is not on premium bond paper bound into a booklet) then you are not signing a legal contract.

The addendum to the contract is printed on normal office paper and is used to amend the official SAFEA contract. This addendum has equal weight to the SAFEA contract and must have the SAFEA contract identification numbers written on it to legally bind them together. Altogether, you will typically sign four sets of documents: two copies of the SAFEA contract and two copies of the addendum. You will keep one copy of each. Some schools will attempt to present you with only the SAFEA contract and no addendum. Unless you are perfectly happy with the standardized SAFEA contract, do not accept this arrangement.

A school's FAO or Western representative may tell you "We cannot modify the contract because it is a standard instrument issued by the government." This is only partially true. Although the SAFEA contact itself cannot be modified, the terms of the contract can be modified by the addendum, which becomes a binding and integral part of the employment agreement.

What Should the Addendum Contain?
The SAFEA contract is an extremely terse official document that does little more than specify the names of the parties, the period of service, the base salary, the standard breach penalty, and very broad terms for making revisions to the contract, as well as who to contact for arbitration. The bulk of what we would consider to be "the contract" is contained primarily in the addendum.

At a bare minimum, here is what the addendum should contain and what you should be looking for:

•Maximum number of classes, teaching periods or hours per week. The addendum should specifically state how many hours per week you are expected to engage in face-to-face teaching.
•Rate of pay for overtime and whether overtime is mandatory or voluntary.
•Probationary period. Some schools will stipulate a probationary period that essentially allows them to terminate you if you are not what they thought you were or need you to be. This period should not be longer than six months (typically the first semester at a university).
•Payment Schedule. Salaries are paid strictly on a monthly basis in China. The addendum should indicate on what day of the following month you will be paid, e.g., "before or on the 5th day of the following month."
•Income tax responsibility. Check the addendum to see who is responsible for paying the incomes taxes assuming your salary is greater than 4800 RMB per month, i.e., is your salary inclusive or exclusive of taxes? Some schools will automatically deduct the taxes for you while others leave it to you to pay your own taxes.
•Accommodations. The more vague or general this is, the more it can potentially work against you. At the very least, the addendum should specify that you will be provided with a kitchen, facilities for cooking, air conditioning and heat, basic furniture, a television set, a water cooler for drinking water, and bedding. Some schools will provide utilities, such as a phone line and a low-speed Internet connection, others will not and a few will specify a utility allowance up to a limited amount every month, e.g., 200 yuan.
•Paid Vacation. The addendum should specify how many days per year you will be given off with salary.
•Days off per week or work days. Specifically check for how many days off per week you will have or, in the alternative, what constitutes a work week. For example, the addendum should specify "teacher will work five days per week," "the foreign expert will teach from Wednesday through Sunday," or "teacher will have two days off per week." If there is no mention of this, it potentially means that you could be called into service seven days per week if need be—and this is a situation you most definitely want to avoid. Finally, read the addendum carefully to ascertain whether your days off will be contiguous or not.
•Sick Leave. There is an awful amount of variability in regard to sick leave. Many private schools will automatically dock a foreign teacher's salary by 1/30th of his monthly salary for each day that is missed due to illness. Most public schools and universities will usually allow up to two days per semester without penalty, but this is something you should check carefully. In one unusual instance we know of, a public university stipulated in its addendum that it would pay the foreign teacher at the full rate of pay for up to 30 continuous sick days with a doctor's note and at 50 percent of the salary for every day thereafter (assuming it didn't decide to terminate the teacher after 30 days, which it also mentioned as an option).
•Prep work, homework, testing, time for grading papers, etc. Check your addendum carefully for stipulations regarding what is expected of you in these areas. As a rule, teaches are expected to invest whatever time they need to prepare for classes and grade homework (if required) without additional compensation. However, the presence of "office hours" in your addendum should serve as a big red flag (see unit Office Hours and Other Free Work).
•Accidental Injury or Medical Insurance. Most SAFEA approved schools will provide nominal health-related insurance, often amounting to nothing more than accidental injury insurance. However, many universities, especially those with medical schools that enjoy adjoining hospitals, will extend real medical benefits to their teachers as well. If your school only provides accidental injury insurance, you might want to consider supplementing it with plans specifically designed for foreign teachers (see unit Travel and Medical Benefits).
Contract Nullification Clauses
When reviewing the addendum, especially those provided to you by private English language schools, what you should carefully check for are stipulations that serve to nullify the entire contract at the sole discretion of the employer (these are usually "buried" towards the bottom of the addendum). During the SARS epidemic, a few years ago, student enrollment at private schools abruptly fell off and many schools simply had to close due to a severe cash flow problem. Nevertheless, under the breach of contract clause, they were required to pay each of their teachers up to a 10,000 RMB penalty, plus provide them with a return airplane ticket. Subsequently, what many schools did thereafter was include a stipulation in the addendum that allows them to terminate all teaching contracts if need be without this constituting a breach of contract. If you see such a clause in your addendum, you should insist that it be removed because it essentially allows the school to terminate you at anytime for any reason they deem important.

How much room do I have to negotiate with?
That entirely depends on how badly the school wants you, as well as their perception of how difficult it would be to find another teacher they are equally interested in. As a rule, you will have a lot more negotiating power with a private school than you ever will with a government school or university. In addition, the better your initial conditions are relative to others, the harder it will be for you to maintain them upon contract renewal (for a thorough discussion of this phenomenon, see unit on Contract Renewal). Generally speaking, the Chinese do not like to set new favorable precedents for one particular employee because they believe that doing so potentially obligates them to later provide the same improved conditions for everyone else. Therefore, the concessions you are most likely to receive, especially from public schools and universities, are the ones for which a precedent has already been set.

Unfortunately, there is no simple way for a prospective foreign teacher to ascertain which concessions have already been granted in the past. However, you will be able to intuit this by reading the school's addendum carefully. If, for example, the addendum indicates that "reasonable improvements will be made to housing upon written request," then it is fair to assume that the school might be willing to place an additional air conditioner in the second bedroom or might even agree to replace the typical 150 yuan rock-hard box-spring/bed with a real coiled-spring mattress.

The potential problem with engaging in ongoing negotiations is that it is very easy to hit a point of no-return the moment you are perceived as being overly demanding (at that is extremely subjective and varies considerably from person to person). Our best advice, especially if you really want or need the job, is to initially ask only for those concessions that you consider to be absolutely essential, as opposed to ideal, until such time that you have already begun working at the school and have become a known entity to them. Once you have proven yourself and the school is genuinely pleased with your performance, then you will have a little bit more latitude in what you can ask for, especially during contract renewal time, particularly if what you are asking for are concessions that don't cost the school more money, e.g., specific days off, more desirable scheduling of classes, etc.

When negotiating via e-mail (or even over the phone and in person), it is best to be as indirect and coy as possible when making requests. The Chinese are quite skilled at picking up on subtle cues and innuendoes, and actually prefer negotiating in this manner. For example, instead of writing or saying "I'll need a coiled-spring mattress," what you should communicate is "Unfortunately, it is difficult for me to sleep on anything but a coiled-spring mattress and I understand the apartments currently do not have them, so I am very concerned about this. What would you suggest?" In response to a salary offer of 4,000 yuan for 16 hours of teaching per week, it is best if you reply with "Please allow me to explain my current situation in the hope that you can provide me with good advice" and then outline your current terms, assuming they are significantly better than what you have just been offered. If the school really wants you, they'll match or exceed your current terms without you specifically having to ask for anything. In addition, by not specifically "demanding" anything, you leave yourself the option of accepting their terms at a later time if nothing better comes along, i.e., neither you nor the school has lost face during the process.

When agreeing to a "starting" salary, keep in mind that, in most cases, the salary you start with will be the same salary you leave with regardless of how many years you work for the same school (and, often, there will be all sorts of attempts to cajole more work out of you for the same money, year after year).

Final Cautionary Word about Contracts
More often than not, the SAFEA addendum you will be presented with was initially written by one of the school's leaders in Chinese and then translated into English (more accurately described as "Chinglish"). Consequently, many of the clauses and stipulations will read ambiguously at best, or will be entirely unclear at worst. You must not make the mistake of viewing ambiguous wording in the proposed contractual addendum as innocuous or the simple benign result of a poor translation. Rest assured that ambiguous meanings will always work against you. If you are not entirely clear as to what is meant or intended by the wording in the contract, you must specifically have it clarified and then insist that the intended meaning, as just explained to you, be clearly rewritten into the SAFEA addendum before you sign it.

Breach of the Contract
You should not be terribly surprised if immediately after signing your contract, your employer hands you a teaching schedule that exceeds your contractual hours or requests that you make substantial concessions or give-backs regarding the contract you just signed, e.g., living in shared housing instead of a single occupancy, receiving a 512kbs Internet connection that is routed across 10 apartments, being asked to hold previously undisclosed "office hours," performing extra unpaid or low-paid work judging English contests, providing English Corners, preparing students for extra-curricular activities, or designing new curriculum, etc. (see unit "Office Hours and Other Free Work" for a detailed description of this). In China, this is a common arrangement in management-employee relations, and Chinese employees are accustomed to these extra demands and not infrequent requests for unpaid overtime, and never raise objections to them. Especially in government-held positions, even high-ranking officials will often be asked to work extra hours during the week, and even on their usual days off, if something pressing or urgent emerges.

To many Chinese business owners, a contract has little significance beyond signaling that the real negotiations have begun in earnest. The sacrosanct view of the contract held by most Westerners is simply considered a formality to many school owners. It is considered customary to continue bargaining and seeking concessions throughout the life of the "contract." Whereas all Chinese accept this as normal behavior (and, in fact, expect it), most foreigners consider this to be an indication of bad faith.

Try not to display anger if this happens. Although a firm, persistent, and resolute approach has its place, losing one's temper and displaying anger signals a significant loss of face in China (see unit on Mianzi and Guanxi). If, at the end of the day, you feel that you and your school cannot continue to work together, you need to find a relatively amicable way to dissolve the relationship.

How to End Your Contract
You must figure out a way to terminate your contract that will be acceptable to your school. Many, who are well-intentioned but relatively naive, will advise you to take your case to the local or regional PSB or ask the SAFEA for arbitration. The thinking is that you can bypass the school and go over their heads. The reality is that your school’s owner or administration has established and maintained long-standing and strong ties with many key officials and those relationships are taken very seriously in China.

The fact of the matter is that, in the overwhelming majority of cases, the PSB will not get very involved beyond offering you a seemingly sympathetic ear. In some cases, they may decide (in consultation with your school) that the best solution is to cancel your residency permit and give you a 30-day tourist visa with which to exit the country. Likewise, and much to the chagrin of many foreigners, you will most decidedly find that your own embassy has an explicit uninterest in employment contract disputes.

Some well-meaning teachers will suggest that you go to the SAFEA for help. Although the SAFEA and various provincial and municipal foreign expert offices and Ministries of Education might occasionally intervene on your behalf, especially in particularly egregious cases, you need to keep in mind that May 2008 regulations require that you receive a letter of recommendation (in addition to a “letter of release”) from your residency permit sponsor, i.e., current employer. Thus "going over the school's head" may be tantamount to cutting off your nose to spite your face.

It is in your best interests to make your early exit from your school as graceful, painless and amicable as possible. The Chinese are patient negotiators and with determination, and often cash, you'll eventually come to mutually acceptable (although not necessarily desirable) terms. Restated, if you have a problem with your employer, it is in your best interests to resolve that problem without burning any bridges in the process. That may mean simply tolerating an unfavorable arrangement until your contract ends, attempting to renegotiate your contract (unlikely at government schools), or reaching a mutually-acceptable termination agreement (one that includes both a letter of release and a letter of recommendation).. Do not waste your time and money seeking the counsel and help of an attorney: Relatively speaking, attorneys are expensive in China and their fees—assuming they are ever able to achieve a favorable result over the course of several months or years—will almost always exceed whatever sums of money are in dispute.

Some teachers—out of sheer desperation, anger, or fear—decide to pull a "midnight runner": They just pack up and disappear one night. That was an arguably viable option years ago, before foreign residency permit information was stored in a national database. In light of recent technological advancements and a May 2008 regulation that requires a character reference from one’s current employer, it no longer is unless the teacher has decided to leave China permanently.

Having just written this, mainland China is not so much a land of laws as it is a country that runs on the strength of interpersonal relationships, i.e., knowing the right person who knows the right person (guanxi). In this context, just about anything is possible if the school is sufficiently motivated to use its guanxi to bring a new teacher in or, related, hold onto a preexisting one. If you find yourself in a situation in which jumping ship seems to make the most sense, then you need to be absolutely forthcoming and straightforward with the prospective employer about the circumstances that have led you to this decision. In the vast majority of cases, private school owners can work miracles for teachers they are very much interested in while public universities do seem to play by the rules in regard to letters of release and recommendation. At any rate, please do be advised that trying to seek subsequent employment in the absence of proper documentation from your prior employer is no longer an easy feat and, at best, your options will be severely limited.