The short answer

  • The name of the contract does not matter; what matters is how the workforce is actually used. Article 7 of the Labor Contract Law of the PRC provides that an employer establishes an employment relationship with a worker from the date it starts using the worker — whether the document is called a Cooperation Agreement or an Artist Agency Contract does not affect the assessment of its nature by actual performance.
  • The core of the test is dominant labor management（支配性劳动管理）. Guiding Case No. 239 of the Supreme People’s Court (database entry no. 2024-18-2-490-001) makes clear that the essential feature of an employment relationship is dominant labor management, that is, personal, economic and organizational subordination, and that the performance requirements of an agency relationship must be kept separate from labor management.
  • Once employment is established, a liquidated-damages clause essentially does not count. Article 25 of the Labor Contract Law provides that, apart from the two situations in Article 22 (service period) and Article 23 (non-compete), an employer may not agree with a worker that the worker bears liquidated damages.
  • Conversely, even if there is no employment relationship, the amount written into the contract is not the amount that must be paid. Article 585(2) of the Civil Code of the PRC provides that where liquidated damages are excessively higher than the loss, a reduction may be requested; in Guiding Case No. 189 an RMB 50 million damages figure in the contract was ultimately set at RMB 2.6 million.
  • Most outcomes turn on evidence. Records in four categories — management, income, setting and communications — should be kept before leaving; the limitation period for labor dispute arbitration is one year (Article 27 of the Law on Mediation and Arbitration of Labor Disputes).

One kind of contract, two outcomes

We handled two such cases in Nanning, involving six streamers, some doing solo livestreaming and some group livestreaming（团播）, who were sued by an MCN and a guild holding a Cooperation Agreement and claiming liquidated damages. In the end they paid nothing. Streamers under the same kind of contract have been ordered to pay elsewhere — the difference lies not on the cover of the contract but in how it was actually performed. That leads to a question we are asked almost every week: the company has me sign a “cooperation” agreement, but I have to start and finish on time, work the shifts assigned to me and pay fines — am I its employee?

1. A contract’s name and its nature are two different things

The common misunderstanding is that if the contract states “the parties do not form an employment relationship”, then no employment relationship exists. An employment relationship is established by the actual use of labor, and Article 7 of the Labor Contract Law puts it plainly — it is established from the date the employer starts using the worker, regardless of what the parties call themselves.

The framework long applied in practice comes from Article 1 of the 2005 Ministry of Labor and Social Security Notice No. 12 on Matters Concerning the Determination of Labor Relations (劳社部发〔2005〕12号), which sets out three elements (the following is a summary of the key points, not the text of the provision): the parties meet the requirements of legal capacity; the employer’s rules and regulations apply to the worker, who is subject to its labor management and performs paid work arranged by it; and the work performed by the worker is a component of the employer’s business.

Article 3, item 2 of the Supreme People’s Court Interpretation (II) on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (Judicial Interpretation No. 12 of 2025, 法释〔2025〕12号), in force from September 1, 2025, continues this approach: where no written labor contract has been concluded, the employment relationship is confirmed on the basis of the employer’s conduct in managing the workforce, taking comprehensive account of factors such as working hours, work content, payment of labor remuneration and social insurance contributions. The anchor is the conduct of workforce management, not the wording of the contract.

2. What courts actually look at: dominant labor management（支配性劳动管理）

Guiding Case No. 239 states the standard most clearly: a livestreamer signed an Exclusive Agency Contract with a media company in Beijing and sought confirmation of an employment relationship together with a bonus and double wages（二倍工资）; neither the first instance nor the appeal upheld the claim.

The reasoning gives three workable lines: first, although the streamer had to be at the workplace on time as arranged, she did not have to comply with the company’s work rules, labor discipline or reward and punishment measures, and the necessary constraints of an agency contract do not amount to labor management; second, the streamer had relatively strong bargaining power over the distribution of revenue, and the revenue-sharing model was clearly different from an employment relationship; third, the content of the contract was mainly agency matters, remuneration distribution and liability for breach, and it did not have the elements of a labor contract.

In plain terms: is the company managing you as one of its own? Unified scheduling, fines for lateness, deductions against performance, prescribed dress and scripts, a mandatory minimum number of hours, permission to use only the company account — the more of these there are, and the more detailed they are, the more it looks like labor management. Conversely, if you decide what to stream and when, if your income comes from a share of tips and the percentage is negotiable, and if you build the audience yourself, the more it looks like cooperation.

3. Streamers who argued for employment and still lost

The road does not run one way. In another case in the Supreme People’s Court Case Database (database entry no. 2023-07-2-490-001, Chongqing No. 1 Intermediate People’s Court), the streamer had signed an Artist Exclusive Cooperation Agreement; the streaming location, content, duration and time slots were all variable, the streamer did not have to comply with the company’s rules and regulations, income came from platform tips shared proportionally, the company did not control the amount, and the platform was a third party. The court held that no employment relationship existed and economic compensation was not supported. So it is neither “attach to an MCN and you are an employee” nor “sign a cooperation agreement and you are certainly an outsider”: loose management, flexible revenue sharing and an independent account point toward cooperation; shift schedules and fines, a fixed base salary and unified deployment are more likely to be employment.

4. Once employment is established, are the liquidated damages still payable?

This is the most important step. Article 25 of the Labor Contract Law is a mandatory rule: liquidated damages borne by the worker may be agreed only in the two situations of a service period（服务期）(Article 22) and non-compete（竞业限制）(Article 23). Beyond that, even if it is written in black and white that “unilateral termination of the contract requires compensation of RMB 500,000”, there is no basis for it in an employment relationship; under Article 26, a clause that excludes the worker’s rights is invalid.

The two exceptions also have boundaries. Service-period liquidated damages presuppose that the company has spent special training funds on professional and technical training, and the amount may not exceed the training costs, nor the training costs allocable to the part of the service period not yet performed (Article 22, paragraph 2). Non-compete applies only to senior managers, senior technical personnel and other personnel who bear confidentiality obligations; the company must pay economic compensation monthly, and the maximum term is two years (Articles 23 and 24).

Liquidated damages of hundreds of thousands of RMB, framed around “leaving” or “moving to a competitor platform”, essentially cannot stand once employment is established. Termination then follows Article 37: thirty days’ written notice, or three days during the probation period.

5. Even outside employment, liquidated damages can be cut

So what if the relationship really is characterized as cooperation? That does not mean paying the full amount either. Article 585(2) of the Civil Code of the PRC provides that where the agreed liquidated damages are excessively higher than the loss caused, the people’s court or the arbitration institution may reduce them appropriately at the request of a party.

Guiding Case No. 189 (database entry no. 2022-18-2-483-001, Shanghai No. 2 Intermediate People’s Court) is an example: the streamer signed an exclusive cooperation agreement, and the breach clause, in addition to fees already paid and training and promotion costs, set out RMB 50 million in damages; the streamer moved to a competitor platform, the platform adjusted its claim to RMB 3 million when it sued, and the court, weighing the streamer’s actual earnings, the platform’s upfront investment, the remaining performance period, the fault of both parties and the platform’s current position, set the figure at RMB 2.6 million.

In negotiation and in litigation, also work out: how much the company actually lost, how much you received from the platform, and whether the company owes unpaid cooperation fees.

6. Four kinds of evidence to keep before you leave

What really decides these disputes is whether you can produce a set of documents that speaks for itself. Keep the original records of all four categories while you are still employed — not just screenshots, and do not delete WeChat messages.

  • Management: shift schedules and go-live notices in work groups, records of fines for lateness and deductions against performance, requirements on prescribed dress and scripts, arrangements requiring a fixed minimum number of hours, and signed or posted rules and regulations.
  • Income: transfers marked “base salary” or “guaranteed minimum” in bank statements, records of payment on a fixed date each month, tax withholding vouchers, and the company’s consolidated settlement statements.
  • Setting: photographs and videos of streaming in the company’s studio, proof that the company provided the equipment and premises, notices requiring the use of the company account only, and team posters and roll-up banners used in external promotion.
  • Communications: chat records with the boss and the operations staff, including designated streaming content, unpaid revenue and unfulfilled promises, and the complete process of resigning and negotiating termination.

There is also a rule that is often overlooked: Article 6 of the Law on Mediation and Arbitration of Labor Disputes provides that where evidence relating to the matters in dispute is controlled and managed by the employer, the employer shall provide it; if it does not, it bears the adverse consequences. So being able to show that a document is in the company’s hands is itself meaningful.

7. What you can claim once employment is confirmed — and the limits

Once employment is confirmed, what can be claimed goes beyond “not paying liquidated damages”. Under Articles 38, 46 and 47 of the Labor Contract Law, where the worker terminates because the company fails to pay labor remuneration in full and on time, fails to pay social insurance contributions as required, or on similar grounds, economic compensation may be claimed: one month’s wages for each full year, six months or more but less than a year counted as a year, and half a month’s wages for less than six months.

Where no written labor contract was concluded, double wages may be claimed under Article 82; Article 6 of Judicial Interpretation No. 12 of 2025 makes clear that double wages are calculated by the month, and any period of less than one month by actual working days. Making up social insurance contributions usually has to go through the complaint channel of the social insurance collection agency; a standalone claim for contribution may not be accepted in arbitration, and local practice is not uniform.

The limits are real too: a labor dispute must first be submitted to arbitration (Article 5), with a one-year limitation period; once employment is confirmed you are also bound by the service period and non-compete, and the revenue sharing and guaranteed minimum negotiated under the cooperation contract may also be revisited.

Final reminders

The statutes and cases cited in this article come from the law currently in force and from publicly available judgments in the Supreme People’s Court Case Database, but the contract text, management style and income structure of each case differ greatly and the conclusion may be the opposite; this is not an opinion on any specific case.

If you are facing a dispute over a streamer terminating an agency relationship, an MCN claim for damages, or the confirmation of an employment relationship, you are welcome to contact Lawyer Wang: telephone 186-0113-9509, WeChat wang223040.

Quick answers

Does a contract labelled a cooperation agreement mean there is no employment relationship with an MCN?
No. Under Article 7 of the Labor Contract Law of the PRC, the employment relationship is established from the date the employer starts using the worker, whatever the document is called. Courts look at actual workforce management — personal, economic and organizational subordination — not at the contract’s title.
Once employment is established, must the streamer still pay the liquidated damages in the contract?
Generally no. Article 25 of the Labor Contract Law of the PRC allows an employer and a worker to agree liquidated damages only for a service period (Article 22) or non-compete (Article 23). Any other penalty clause, including one for leaving, has no basis and is invalid under Article 26.
If there is no employment relationship, can the liquidated damages be reduced?
Yes. Under Article 585(2) of the Civil Code of the PRC, liquidated damages excessively higher than the actual loss may be reduced appropriately on a party’s request; in Guiding Case No. 189 a claim of RMB 50 million was set at RMB 2.6 million.

This is an English edition of Wang Xin’s original Chinese article, 合同写的是「合作协议」，离职却被索赔50万：主播和MCN，到底算不算劳动关系？. It explains the law of the People’s Republic of China in general terms and is not legal advice for any particular case; outcomes depend on the specific facts and on how local authorities apply the rules.