[Direct answer]The "N, N+1, 2N" in economic compensation correspond to three situations: N is economic compensation, according to Articles 46 and 47 of the Labor Contract Law of the People's Republic of China (implemented on January 1, 2008 and amended in 2012), such as negotiated termination, forced termination, termination without fault, and the unit's failure to renew the contract upon expiration. The compensation is one month's salary for each completed year of service; N+1 is an additional one month's salary on top of N, only applicable to the situation of termination without fault according to Article 40 where the unit fails to provide written notice 30 days in advance; and 2N is compensation for unlawful termination or termination, which is paid at twice the standard of economic compensation according to Article 87. When leaving the job, it is necessary to first clarify the nature of the termination and then discuss the compensation standard. This can be done through negotiation or legal channels.Labor arbitration and legal services for work-related injury compensationLearn about the legal channels to protect your rights, or consult a lawyer directlyBeijing Henglu Law Firm.

1. Problem background and typical scenarios

When it comes to settlement of employment termination, "N, N+1, and 2N" are the three concepts that workers ask about most frequently and are also the most easily confused by companies. Typical scenarios include: when the company is facing operational difficulties and layoffs, they verbally promise "compensation" but calculate it according to the minimum standard; when they delay paying salaries to force employees to resign, they claim that "resignation for personal reasons does not entitle compensation"; when they directly dismiss employees, they make them sign a "consensual termination agreement" to disguise the illegal dismissal as a legal one; and when they use the excuse of not giving advance notice, they only offer N+1 compensation, evading their responsibility to pay compensation. The nature of the termination determines the compensation level, and the difference in compensation levels can be more than double. As a result, many workers lose tens of thousands or even hundreds of thousands of yuan in compensation.

II. Key points of contention

  • Resolving the nature of the dismissal: Whether it is a negotiated dismissal, a forced dismissal, a dismissal without fault, or an illegal dismissal directly determines whether the employee will receive N months, N+1 months, or 2N months of compensation. Employers often try to erase the evidence of an illegal dismissal by making employees sign a "resignation due to personal reasons".
  • The debate over the monthly salary base: Should it be calculated based on the basic salary or the earned salary? According to Article 27 of the Implementing Regulations of the Labor Contract Law, the monthly salary for economic compensation is calculated based on the earned salary, and all monetary income such as bonuses, allowances, and subsidies should be included. If the company only calculates it based on the basic salary, the compensation will be significantly underestimated.
  • The dispute over working years: Can the working years of employees who transfer between different units be counted continuously? How should they be divided before and after 2008? Should the calculation be based on the date of termination or the date of resignation? For every additional year of service, there is a one-month difference in salary.

III. Professional analysis by Henglue Lawyers

Take the case of forced termination due to unpaid wages handled by Henglue Law Firm as an example: Zhang * was an employee of a telecommunications company. On October 1, 2019, he signed an indefinite-term labor contract with a monthly basic salary of 7,917 yuan plus variable performance bonuses. Since September 2009, his work location and job responsibilities had remained unchanged. Due to the company's failure to pay wages on time and in full, Zhang * worked until January 14, 2022, and sent a "Notice of Forced Resignation" to the company the next day. The company signed for receipt on January 17, but only retroactively paid the wages for November and December 2021 on January 29 and February 28, 2022. Zhang * entrusted Henglue Law Firm to claim economic compensation for the terminated contract and unpaid annual leave wages. The company appealed against the arbitration and first-instance judgment, arguing that Zhang * had no performance bonuses after the job transfer, that the two companies were not affiliated, that the operational difficulties were not due to malicious wage arrears, and that the calculation of his work experience was incorrect. In the second-instance defense, the lawyer pointed out that the company's failure to pay wages on time and in full constituted a legal basis for Zhang *'s forced termination and economic compensation claim; that Zhang * was not transferred to a new employer for reasons beyond his control, that his work location and responsibilities remained unchanged and that his social insurance contributions overlapped, so his work experience should be continuously calculated; and that the company failed to provide evidence of consultation on the cancellation of performance bonuses or to prove that it had arranged annual leave or paid unpaid annual leave wages. The court ruled that the first-instance judgment was based on clear facts and correct application of the law, and ordered the company to pay economic compensation of 295,207.08 yuan and unpaid annual leave wages of 40,347.66 yuan. The second-instance court dismissed the appeal and upheld the original judgment. This case illustrates that the success or failure of N's claims in forced termination cases depends on the written evidence of unpaid wages and the reasons for termination.

IV. Practical Suggestions and Legal Basis

At the legal basis level: Article 46 of the Labor Contract Law of the People's Republic of China (implemented on January 1, 2008 and amended in 2012) lists the circumstances under which economic compensation should be paid, including when the employee is forced to terminate the contract according to Article 38, when the employer proposes to terminate the contract by mutual consent, when the employee is dismissed without fault, when there is economic layoffs, and when the employer does not renew the contract or renews it under less favorable conditions after the contract expires; Article 47 stipulates that the compensation shall be one month's salary for each completed year of service, one year's salary for more than six months but less than one year, and half a month's salary for less than six months. If the monthly salary is more than three times the average monthly salary of local workers in the previous year, the compensation shall be capped at three times the average monthly salary and the service period shall not exceed 12 years; Article 40 stipulates that if the employee is dismissed without fault and is not notified in writing 30 days in advance, an additional month's salary shall be paid; Article 87 stipulates that in the case of unlawful termination or termination, the compensation shall be twice the standard of economic compensation. At the practical advice level: Before leaving the job, maintain fixed labor contracts, salary records, social insurance records, attendance records, and termination documents; When terminating the contract, it is necessary to clearly state the specific circumstances according to Article 38; If there is a dispute over the nature of the termination, the employee shall apply for arbitration within one year from the date of knowing that his rights have been infringed; If the other party refuses to perform the judgment after winning the case, the employee may apply for compulsory enforcement by the court, and the relevant procedures can be referred to for reference.Legal services for creditor-debtor disputes and enforcement cases.

5. Henglu Law Firm's Reminder

The differences between N, N+1, and 2N essentially lie in the distinction between the nature of the termination and the legality of the procedure. Three points should be noted: First, do not easily sign documents such as "resignation due to personal reasons" or "voluntary waiver of compensation", as signing these documents may result in the loss of all grounds for claiming rights; Second, in the case of forced termination, it is necessary to provide written notice and specify the statutory circumstances. If an employee resigns orally and then claims rights later, it will be much more difficult to succeed; Third, the monthly salary base should be calculated based on the actual salary including bonuses and allowances. If the company only calculates it based on the basic salary, the employee should immediately raise written objections. The above-mentioned case of forced termination and unpaid wages was handled by Beijing Henglu Law Firm.Wang XinruiThe lawyer (practice license number: 11101202111290829, subject to the document issued by the judicial administrative organ) acted on behalf of the worker, ultimately securing over 330,000 yuan in compensation. If you are currently facing similar disputes, it is recommended that you sort out your work experience and salary records as soon as possible and assert your rights within the arbitration statute of limitations.

Q1: If you're dismissed by the company, can you always get 2N compensation?

Not necessarily. The 2N compensation only applies to situations where the employer unlawfully terminates or terminates the labor contract (Article 87), such as dismissal without legal grounds, illegal procedures, etc. For lawful no-fault dismissal (Article 40), the employer pays N or N+1. If the worker is dismissed due to failing to meet the employment conditions during the probationary period or committing serious disciplinary violations (Article 39), the employer does not need to pay compensation. According to Article 44 of the "Interpretation of the Supreme People's Court on the Application of Law in the Trials of Labor Disputes Cases (I)" (effective April 1, 2021), the employer bears the burden of proof for the termination decision, and the worker should focus on fixing evidence such as the dismissal notice and conversation recordings, and then choose to claim compensation or compensation according to the nature of the termination.

Q2: What evidence do I need to prepare to claim economic compensation?

The core evidence includes two sets of facts: First, the labor relationship and work experience, including labor contracts, social insurance payment records, salary slips, work badges, and employment registration forms. For those who transfer between different units, they need to keep the original contracts and transfer documents to prove the continuity of their work experience. Second, the facts and reasons for termination, including termination notices, written notices of forced termination and mailing receipts, arrears in wages, chat records, and audio recordings. The monthly wage base is calculated by averaging the wages earned in the 12 months prior to termination, and bonuses, allowances, and subsidies should all be included (Article 27 of the Implementing Regulations). For performance bonuses paid in cash or to other accounts, additional payment receipts should be collected to avoid the base amount being lowered.

Q3: How much does it cost to file a labor arbitration case?

Labor arbitration is free of charge. Article 53 of the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes (effective May 1, 2008) stipulates that labor dispute arbitration is free of charge, and the arbitration committee's funds are guaranteed by the government. For those who file lawsuits against the arbitration awards, the acceptance fee for labor dispute cases is only 10 yuan. The main costs are attorney's fees and time costs. Attorney's fees are usually charged on a per-case or per-dispute amount basis, subject to the written power of attorney contract. For requests for economic compensation, the subject matter is clear and the evidence chain is relatively standardized. Most cases do not require property preservation, so the overall cost of protecting rights is manageable. The more complete the evidence is, the lower the cost and duration of the litigation will generally be.

Q4: How long does it usually take from arbitration to receiving the money?

The arbitration tribunal shall conclude the case within 45 days from the date of acceptance, and the case may be extended for no more than 15 days if it is complex and approved (Article 43); any party dissatisfied with the ruling may file a lawsuit within 15 days. The first-instance ordinary procedure generally concludes within 6 months, the summary procedure within 3 months, and the second-instance procedure within 3 months. It may take about a year to complete all procedures; if the other party refuses to pay after the ruling or judgment takes effect, it is necessary to apply for enforcement. Disputes arising from arrears in labor remuneration during the existence of the labor relationship are not subject to the one-year arbitration statute of limitations, but if the labor relationship terminates, the claim must be raised within one year from the date of termination (Article 27). It is important not to delay.

Q5: The company asked me to sign a "Consensual Termination" agreement. What should I pay attention to before signing it?

Before signing, check the following three points: whether the compensation amount is not lower than the N standard, whether the monthly salary base is calculated according to the actual salary, and whether the payment time is clear. According to Article 46(2) of the Labor Contract Law, if the employer proposes to terminate the contract by mutual consent, the employer shall still pay economic compensation; if the agreement states "resignation for personal reasons" or "waiving all rights", it will be extremely difficult to change one's mind afterwards. If the other party pressures you by saying "you'll get compensation only if you sign it, and you'll get nothing if you don't sign it", you can request a reasonable consideration period and consult a lawyer to review the terms if necessary. If you have already signed the agreement but the company refuses to fulfill its obligations, you can directly apply for arbitration to claim compensation according to the agreement.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Labor arbitration legal services·Attorney Wang Xinrui·Beijing Henglue Law Firm