Although China’s Labor Contract Law stipulates that liquidated damages can be applied for service period, the applicable scope of liquidated damages provision is too narrow to meet the need of practice. The liquidated damages provision of service period reflects more compensation than punitive damages. Although such a provision is in line with the purpose of protecting the workers, the practice and theoretical analysis show that it is contrary to the original intention of the legislators and deviates from the track of the inclined protection towards workers. In order to meet the demand of workers, improve labor value, keep the balance of rights and obligations between employers and workers and truly achieve the goal of protecting workers finally, we need to update the concept of liquidated damages provision of service period and improve legal norms of the existing service period