Kids Castle Kindergarten in Kunming will be looking for teachers soon. Just a heads up on their new policy. They will keep 10% of your pay each month as a penalty incase you break contract. I was shocked when I was told this, as I, like most people, like to be paid on time for the work I have done. I withdrew my application as I find it very unfair and untrusting on their behalf when we should have been starting a healthy working relationship. Had anybody heard of this practice happening in other schools?

This is probably against the local labor laws, but I assume they don't employ teachers on a work visa, as legally required. Any contract is probably worthless.

However, I believe that, under Chinese labor laws, if you remove goods from the school to the value of money you thing that you are owed, that is permissible.

Sounds harsh. How long are the contracts for? Result of traditional year-end bonus policy should (and I think often does) keep employees to their contracts. In some places (Hong Kong) these bonuses are in the neighborhood of a month's pay.

1 year contract and no talk of offering visas or a contract completion bonus. A friend also mentioned it is illegal to keep pay from staff but if it doesn't offer visas then the contract is worthless and maybe the held money would never be returned to the employee as there is nothing that could be legally done about it. I'd warn people not to accept the position if they happen to stumble apon it.

Those are red flags. Stay away from schools like that.

I think this is the self-fulfilling, negative feedback loop, death-spiral business model at work here.

From the school's perspective, I'm sure they were burned in the past by foreign teachers who justified breaking the contract by blaming the school for not being honest, professional, etc, instead of looking at themselves in the mirror.

The schools, instead of objectively looking at their hiring practices, the quality of the recruit, their own compensation package, etc, simply put the problem squarely on all "laowais" and wrote them off as unprofessional and unreliable to justify their new employment policies.

Such employment policies will only attract lower quality teachers which breeds more distrust as the OP puts it, which further erodes how Chinese organizations view foreign teachers.

There are two ways of doing incentives - one is the bonus, one is the penalty. Personally, I would search for firms offering contract completion bonuses as opposed to contract completion penalties.

pay peanuts, get monkeys, try to beat them then dont be surprised if they poo on the carpet before they run out the door

Seems to me bonuses and penalties are flip sides of the same coin - if the contract is one year, the 10% withheld is returned, in effect, as a bonus. However, schools that suddenly decide to withhold 10% of agreed-upon monthly pay, with this not having been stated in the original contract, should be publicized as being run by aholes, avoided, and hauled before whatever labor tribunal you can find that will listen.

withold pay is illegal in china, no way you can call it a bonus, as bonus is on top of pay