Yeah, there are many things in China that dont seem right.

From Illegal Companies to Bad manners.

The best thing to do is to organize. I think every company should have a group of foreigners who work together. It is best to work for a company that has at least five or move foreign teachers already working there, it shows a bit of stability.

I noticed the best companies pay everyone according to the amount of classes they teach, so everyone is paid equally according to the amount of work they do. Also, the best companies will give the teachers the freedom of choice, to get a company apartment or to get a housing allowance of 2000rmb per month, and also airfare paid in monthly installments such as 500rmb per month for airfare added onto the monthly salary

And of course, the best and legal companies will have something called an:

OVERSEAS EMPLOYMENT LICENSE