If the company demands liquidated damages when you leave, first see which kind: only a service period after special training, and non-compete, may agree liquidated damages; other labels are not allowed by law

A contract line that “leaving early means you pay” is allowed by law in only two situations: the company paid for specialized technical training for you, or non-compete. Where there really was special training, damages cannot exceed training costs, and must be prorated for the unfinished service period.

Cost

No cost. Pull out the labor contract, training agreement, and non-compete agreement and check them against each other—a few minutes. If the company deducts wages to cover liquidated damages, recover them through labor arbitration. Arbitration is free; cases close within 45 days, extendable by at most 15 days. If you disagree, go to court; ordinary first-instance procedure starts at 6 months, and you pay your own lawyer.

Benefit

The Labor Contract Law provides that except for a service period after special training and non-compete, the employer may not agree that the worker bears liquidated damages. The first is when the employer pays special training expenses to send you for specialized technical training and may agree a service period with you. If you leave early in breach of the service period, you pay liquidated damages as agreed. Liquidated damages must not exceed the training expenses the employer paid. What the employer can actually claim must not exceed the training expenses allocated to the unfinished part of the service period. Example: training costs 30000 yuan (3万), service period 3 years; leave after 2 years, at most 10000 yuan (1万). Training expenses need vouchers, including training fees, travel during training, and other direct costs caused by the training. If you lawfully terminate because of employer faults such as unpaid social insurance or unpaid wages, that is not a breach of the service period, and the employer may not claim liquidated damages. The second is non-compete; rules are in Section 11, Item 12 (non-compete agreement). Also, contract clauses that exempt the employer from statutory duties or exclude the worker’s rights are void (nationwide)

Notes

No liquidated damages does not mean leaving costs nothing. If you leave without 30 days’ written notice, or breach confidentiality or non-compete and cause the employer loss, you must compensate the loss. How much loss is for the employer to prove. If the employer provided special benefits such as hukou (户口) and agreed a service period, and you leave early, a court may order you to compensate. How much depends on actual loss, fault on both sides, and how long you already worked. Beijing practice is that liquidated damages tied only to the employer helping with hukou are not supported, but you still compensate loss you caused the employer by breaking good faith. If the employer terminates you for serious misconduct, serious dereliction, or criminal liability, service-period liquidated damages are still owed. If the contract ends while the service period is unfinished, the contract extends to the end of the service period unless the parties agree otherwise. How to recover deducted wages: Section 7, Item 2 (complain to labor inspection first for unpaid wages). Benefit graded medium by judgment: liquidated-damage amounts are written into each contract; there is no uniform figure.

Sources · 4

1. 全国人大常委会 (2012 修正). 劳动合同法（第二十二、二十三、二十五、二十六、三十七、九十条）. fgk.chinatax.gov.cn/zcfgk/c100009/c5193025/co…（国家税务总局政策法规库转载）；国务院 (2008). 劳动合同法实施条例（国务院令第 535 号，第十六、十七、二十六条）. gov.cn/gongbao/content/2008/content_1107604.htm
2. 最高人民法院 (2025). 关于审理劳动争议案件适用法律问题的解释（二）（法释〔2025〕12 号，第十二条）. court.gov.cn/zixun/xiangqing/472691.html
3. 北京市高级人民法院、北京市劳动人事争议仲裁委员会 (2024). 关于审理劳动争议案件解答（一）（京高法发〔2024〕534 号，第 82 问）. beijing.gov.cn/zhengce/fygfxwj/202405/t202405…
4. 全国人大常委会 (2007). 劳动争议调解仲裁法（第四十三、五十三条）. rsj.ankang.gov.cn/Content-2150407.html（安康市人力资源和社会保障局转载）；国务院 (2006). 诉讼费用交纳办法（国务院令第 481 号，第六、十三条）. gov.cn/ziliao/flfg/2006-12/29/content_483682.htm