A wide-ranging draft civil code is set to be completed by 2020.
It would then go to a vote at the rubber-stamp legislature, the National People's Congress (NPC).
The proposed regulations would ban sexual harassment and include a definition of what constitutes an offence, the official Xinhua news agency said.
China probes claims head abbot sexually harassed nuns
There is currently no legal definition of sexual harassment in China and no national regulations on how to handle such cases in schools and workplaces.
Employers would have to "take reasonable measures" to prevent sexual harassment in the workplace and handle complaints appropriately, Xinhua reported.
China has seen a growing #MeToo movement in recent months as various high-profile individuals face allegations of sexual misconduct.
They include the former head of the government-run Buddhist association, who is under investigation for alleged sexual assaults against several nuns under his charge, and a prominent television host.
The civil code was discussed at a meeting of the Standing Committee of the NPC.
Other proposed changes in the draft code include a one-month cooling off period before a divorce, during which either party can withdraw their application, and a possible change to limits on the size of families.
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