If a company fires you without 30 days’ notice, it must pay an extra month’s salary

5. If a company fires you without 30 days’ notice, it must pay an extra month’s salary

Cost: No cost at all.

In plain terms: If a company terminates your employment without giving 30 days’ written notice, it must pay you an additional month’s salary on top of the standard compensation. This is commonly referred to as “N+1.” When negotiating, make sure this extra month is listed separately so the company doesn’t include it in the base amount “N.”

Benefit: Under labor law, when an employer ends a contract under this provision, there are two permissible options: either provide 30 days’ written notice to the employee, or pay an extra month’s salary and then terminate the contract. If the employer wants you to leave immediately, it must pay this additional month’s wage. This extra payment is known as “notice pay” and is calculated separately from “N.”

Evidence grade: A

Sources: Standing Committee of the National People's Congress (2007). Labor Contract Law of the People's Republic of China (effective on January 1, 2008) (Articles 36, 39, 40, 41, 46, 47, 87). <http://www.gov.cn/gongbao/content/2007/content_711013.htm>; State Council of China (2008). Regulations for the Implementation of the Labor Contract Law (State Council of China Order No. 535) Article 20: "If the employer chooses to pay an additional month's salary to the employee to terminate the labor contract in accordance with Article 40 of the Labor Contract Law, the additional salary shall be determined based on the employee's salary standard for the previous month." <http://www.gov.cn/gongbao/content/2008/content_1107604.htm>

Notes: Consequently, the typical outcome of a lawful termination under these circumstances is “N+1.” During negotiations, keep the base compensation “N” and the extra month distinct to prevent the employer from bundling them together.