Links Labour Law Insider – Latest APAC Tax, Payroll & Labour Law Updates
Introducing the latest edition of Links’ Labour Law Insider, our quarterly publication. This summary covers key updates in taxation, labour laws, payroll, and visa regulations across Asia Pacific, offering you a concise yet thorough overview of recent legislative changes.
For more news and insights into the market, make sure to subscribe to our blog so you don’t miss out on the latest HR news, or contact our team to learn more about the latest changes!
- Hong Kong
- Hong Kong Launches Pilot Subsidy Scheme to Boost Employment of Disabled CSSA Recipients
- Mainland China
- China’s Stamp Duty Reliefs for Corporate Restructurings
- China Extends Tax Relief Measures to Support the National Equities Exchange and Quotations (NEEQ) Bourse
- China to Raise the Statutory Retirement Age
- China Issues Regulations on Implementing Registered Capital Management System of Company Law
- Notice on Further Facilitating Cross-District Migration of Taxpayers
- Singapore
- Revision on Heat Stress Management Measures for Outdoor Workers
- CPF Daily Withdrawal Limit Lowered to S$50,000
- Singapore To Implement Labour Protections for Platform Workers in 2025
- Singapore Updates Income Tax Computation Guidance for Companies Using Other Currencies
- Employment Pass (EP) Salary Benchmark Revised
- Singapore Updates on Advance Ruling System for GST
- Retirement and Re-employment Ages for Civil Servants Increased
- Singapore Introduces S$500 Annual Benefit for Civil Servants
- Malaysia
- Malaysia Increases Visa Fees for Foreign Workers
- Malaysia’s E-Invoicing Requirements Take Effect
- Changes on Extension of the Invalidity Scheme Coverage to Foreign Workers
- Increment of the Wage Ceiling Limit in Malaysia
- Revised e-Invoice Implementation Timeline
- Vietnam
- Vietnam’s Increase in Salary and Regional Minimum Wages
- Indonesia
- Indonesia Launches Golden Visa to Attract Foreign Investors and Skilled Professionals
- Taiwan
- Taiwan Raises Minimum Monthly Wage
- South Korea
- South Korea’s Health Insurance Premium Remains Unchanged for 2025
- South Korea Sets Minimum Wage at KRW10,030 Per Hour for 2025
- Thailand
- Thailand’s Tax Reliefs for Environmental, Social and Governance (TESG) Fund
- Tax Reliefs for Returning Graduates Announced
- Thailand Expands Visa-Free Entry and Digital Nomad Visas
- Philippines
- Philippines’ VAT Exemption on Medicines Expanded
- Philippines CSC Adopts Flexible Work Arrangements
- Philippines Approves PHP35 Wage Increase for NCR Private Sector Workers
- Cambodia
- Cambodia Declared 5 August 2024 as Public Holiday For Funan Techo Canal’s Inauguration
- Holiday Calendar for Civil Servants, Workers/Employees for 2025
- Changes in Minimum Wage for Workers/Employees in the Textile, Garment, Footwear, Travel Goods and Bag Industries for 2025
- India
- India Launches Electronic Dispute Resolution Scheme (e-DRS)
- India Launches SHe-Box Portal to Enhance Workplace Safety for Women
- India Introduces Unified Pension Scheme to Secure Retirement for Central Government Employees
- India Clarifies Regulations for Obtaining an Income Tax Clearance Certificate
- India Enacts Finance (No.2) Act, 2024
- India’s EPFO Updates Rules for Correcting Employee Account Details
- India Extends EPS Withdrawal Benefits to Members with Less than 6 Months of Service
- NPS Vatsalya Scheme Launched in New Delhi
- India’s Union Budget: Tax Reforms and Reliefs
- The Introduction of the Maharashtra Labour Welfare Fund (Amendment) Bill
- Japan
- Changes in Minimum Wage Effective 1 October 2024
- Japan Expands the Scope of Recipients of Child Allowances and Changes the Amount of Allowances
- Myanmar
- Myanmar Increases Minimum Wage
- Australia
- Australia’s ‘right to disconnect’ Law Now in Effect
- New Zealand
- New Zealand Introduces New Seasonal Work Visa Sub-Category
- New Zealand Increases Cap on RSE Scheme Workers
If you have any questions regarding the content please contact Bella Khan at bella.khan@linksinternational.com or Lynette Liew at lynette.liew@linksinternational.com.
HONG KONG
Hong Kong Launches Pilot Subsidy Scheme to Boost Employment of Disabled CSSA Recipients
On 1 September 2024, the Hong Kong government launched the “Stepping Stone” Pilot Scheme, providing an HK$500 monthly employment subsidy to disabled recipients of the Comprehensive Social Security Assistance (CSSA).
Funded by the Community Care Fund, the 3-year scheme encourages disabled individuals capable of working to participate more actively in the workforce. Managed by the Social Welfare Department, eligible recipients do not need to apply. Subsidies will be deposited quarterly, starting from December 2024.
Seeking to simplify your HR administration and payroll processes in Hong Kong? Contact our professional payroll team now!
MAINLAND CHINA
China’s Stamp Duty Reliefs for Corporate Restructurings
The State Administration of Taxation introduced stamp duty relief measures aimed at supporting corporate restructurings and reorganisations. These measures will be effective from 1 October 2024 until 31 December 2027.
The initiatives aim to prevent double taxation during corporate changes. Under certain conditions, the company inheriting a contract will receive the same tax treatment, and no additional tax liability will arise if a tax due has already been settled for taxable contracts signed prior to the restructuring. Additionally, a stamp duty exemption has been established for property transfer documents related to restructurings, mergers, divisions, or bankruptcy proceedings.
China Extends Tax Relief Measures to Support the National Equities Exchange and Quotations (NEEQ) Bourse
China announced the continuation of tax relief measures for the National Equities Exchange and Quotations (NEEQ) bourse, supporting shares of micro, small, and medium-sized enterprises. These measures will be in effect from 1 July 2024 to 31 December 2027.
Key tax reliefs include a temporary waiver of personal income tax on dividends and bonuses for individuals holding shares in a listed company for over a year. For those holding eligible shares for at least one month but less than a year, a 50% waiver will apply, with the remaining taxed portion subject to a 20% rate.
Listed companies are responsible for withholding taxes from payments and remitting them to the tax authority. The holding period will be determined using the first-in, first-out principle. Although the measures are extended from 1 July 2024, the acquisition date will be crucial for calculating the holding period.
China to Raise the Statutory Retirement Age
China will gradually postpone the statutory retirement age over the next 15 years. The reform aims to adapt to the new situation of China’s population development, and fully develop and utilise human resources.
According to the measures, starting 1 January 2025, the retirement age for men will be gradually increased from 60 years to 63 years. While the retirement age for women will gradually increase from 50 years to 55 years for blue-collar workers, and from 55 years to 58 years for white-collar workers.
In addition, starting from 1 January 2030, the minimum pension contribution period will gradually rise from 15 years to 20 years.
China Issues Regulations on Implementing Registered Capital Management System of Company Law
As of 1 July 2024, the regulations clarify relevant arrangements during the transitional period of adjusting the time limit for shareholders to pay in their subscribed capital at existing companies.
For companies registered before 30 June 2024, the remaining period for their shareholders to pay registered capital contributions shall be adjusted to shorter than five years if the existing time limit exceeds five years from 1 July 2027, according to the regulations.
The authorities will also refine supervision and inspection measures on companies’ capital subscriptions while optimising procedures for companies to adjust the time limit of capital subscriptions according to the regulations.
Notice on Further Facilitating Cross-District Migration of Taxpayers
The State Administration of Taxation announced a notification on further facilitating cross-district migration of taxpayers, which is effective from 1 September 2024.
The purpose of this announcement is to speed up the decision-making and deployment of the national unified large market construction, promote the smooth flow of production factors, the efficient allocation of various resources, and continue to optimise the tax and business environment.
The notification mentioned that the local tax bureau should take action on below improvement:
- To optimise the advance reminder by pushing guidance actively.
- To expedite the process by subdivided different scenarios.
- To improve post-service by continuing to track counselling.
Planning to expand your business into China? Learn more about how our professional HR team can help!
SINGAPORE
Revision on Heat Stress Management Measures for Outdoor Workers
On 6 September 2024, Singapore’s Ministry of Manpower has updated heat stress management guidelines to protect outdoor workers in varying temperatures.
The revised measures align with the 3-tier Heat Stress Advisory, using the Wet Bulb Globe Temperature (WBGT) to guide employers on necessary and recommended practices. This framework allows flexibility for employers to implement localised solutions based on environmental conditions. Employers must ensure such workers are fit for outdoor work by seeking consent and providing medical consultations if needed.
CPF Daily Withdrawal Limit Lowered to S$50,000
As of 25 September 2024, the maximum daily withdrawal limit from Singapore’s Central Provident Fund (CPF) will be reduced from S$200,000 to S$50,000 to enhance protection against scams. CPF members can currently set withdrawal limits within this range, with additional security measures such as enhanced authentication and a 12-hour cooling period to prevent unauthorised changes.
Singapore To Implement Labour Protections for Platform Workers in 2025
Starting 1 January 2025, platform workers in Singapore, including ride-hailing and on-demand delivery workers, will receive enhanced labour protections. These measures require companies such as Grab and Foodpanda to provide work injury compensation and contribute to workers’ Central Provident Fund (CPF), bringing protections in line with those of traditional employees.
Key changes include:
- Work Injury Compensation: Platform companies must insure workers under the Work Injury Compensation Act.
- CPF Contributions: Companies will contribute to platform workers’ CPF savings, with workers’ contribution rates also increasing.
- Representation: Workers will have the right to representation by bodies similar to unions.
To ease the transition, the Platform Workers CPF Transition Support (PCTS) scheme will offer cash payouts to low-wage workers, covering 100% of the CPF contributions increase in 2025, tapering off until 2029. The qualifying monthly income cap for the scheme and the Workfare Income Supplement (WIS) will increase to S$3,000 in 2025.
Workers aged under 30 in 2025 must comply with full CPF contributions, while older workers can choose to opt-in.
Singapore Updates Income Tax Computation Guidance for Companies Using Other Currencies
On 12 August 2024, the Inland Revenue Authority of Singapore (IRAS) has updated its guidance on filing income tax computations in currencies other than the Singapore dollar. An amendment exempts companies licensed under the Insurance Act 1966 from this requirement for accounting periods starting on or after 1 January 2023.
Changes include the removal of paragraphs on franked dividends and irrelevant dividend payments under the imputation system.
Employment Pass (EP) Salary Benchmark Revised
The Ministry of Manpower updated the salary benchmarks for the Complementarity Assessment Framework (COMPASS), applicable to EP applications. Starting from 1 January 2025, new EP applications will require a minimum salary of S$5,600 (S$6,200 for financial services). For renewals, EPs expiring from 1 July 2025 must also meet these revised salary requirements.
Current salary benchmarks remain in place for EP applications filed until 31 December 2024 and renewals for passes expiring between 1 September 2024 and 30 June 2025. The benchmarks adjust based on age, with higher salaries for older applicants.
Singapore Updates on Advance Ruling System for GST
On 15 July 2024, The Inland Revenue Authority of Singapore (IRAS) has clarified the procedures for the GST advance ruling system in its e-Tax Guide. Advance rulings cannot be issued for transactions reported in GST returns already submitted or due within a month.
Retirement and Re-employment Ages for Civil Servants Increased
From 1 July 2025, Singapore will raise the retirement age for civil servants to 64 and the re-employment age to 69, ahead of the planned increase in 2026.
Singapore Introduces S$500 Annual Benefit for Civil Servants
Starting October 2024, eligible civil servants in Singapore will receive an annual benefit of S$500, named FlexiGrow, to support their health, growth, and well-being. This benefit can be used flexibly for personal development courses and fitness programs.
Additionally, from 1 January 2025, enhancements to medical and dental benefits will take effect. The annual medical subsidy cap will increase from S$500 to S$1,000, and the cap for outpatient expenses at private clinics will rise from S$20 to S$50 per visit. Dental subsidies will also increase from S$120 to S$250 annually, encouraging regular dental check-ups.
Have a business in Singapore? We can help you improve your business’ HR efficiency!
MALAYSIA
Malaysia Increases Visa Fees for Foreign Workers
Malaysia announced a significant increase in visa application fees for expatriates and their dependants, effective from 1 September 2024. The MYXpats Centre, part of the Immigration Department’s Expatriate Services Division, detailed the changes affecting key visa categories:
- The Employment Pass, which allows expatriates to work in Malaysia, has seen an increase of approximately 150%, with the new fee set at MYR2,000.
- The Professional Visit Pass, issued to foreign professionals for training or services on behalf of a foreign company, now costs MYR1,200.
- The Long-Term Social Visit Pass, allowing foreigners temporary stays of at least six months, has been raised to MYR500.
These increased visa fees may have significant implications for expatriates and their employers, particularly in sectors that depend heavily on foreign expertise.
Malaysia’s E-Invoicing Requirements Take Effect
The Inland Revenue Board of Malaysia announced the implementation of electronic invoicing requirements for businesses with a turnover of at least MYR100 million, as of 1 August 2024.
Starting in January 2025, these requirements will extend to businesses with a turnover exceeding MYR25 million, and by 1 July 2025, e-invoicing will become mandatory for all taxpayers.
To assist businesses in compliance, the Inland Revenue Board has provided guidelines on its website, offering a detailed overview of the invoicing process and outlining the necessary information to be included in electronic invoices.
Changes on Extension of the Invalidity Scheme Coverage to Foreign Workers
Effective 1 July 2024, all foreign workers, including expatriates, will be required to contribute under Category 1, which encompasses both Employee and Employer contributions, similar to local workers.
This development marks a significant step forward for social security in Malaysia, contributing to a more inclusive social protection system that supports all workers fully equally.
Increment of the Wage Ceiling Limit in Malaysia
Starting 1 October 2024, PERKESO has raised the wage ceiling for contributions from RM5,000 to RM6,000 per month.
The contribution amounts for employees earning above RM5,000 are outlined in the Third Schedule, Act 4, and the Second Schedule, Act 800.
For those with salaries exceeding RM6,000, contributions will be capped at the RM6,000 wage ceiling. Employers are required to follow the new wage ceiling for contributions from October 2024 onwards.
Revised e-Invoice Implementation Timeline
The development of the e-Invoice system and infrastructure will be divided into 3 phases to ensure smooth delivery:
- Phase 1 – 1 August 2024 – Mandatory implementation for taxpayers with an annual turnover or revenue of >RM100m.
- Phase 2 – 1 January 2025 – Mandatory implementation for taxpayers with an annual turnover or revenue between RM25m to RM100m.
- Phase 3 – 1 July 2025 – Mandatory implementation for all other taxpayers.
We can help your business in Malaysia grow! Learn more.
VIETNAM
Vietnam’s Increase in Salary and Regional Minimum Wages
As of 1 July 2024, public sector workers in Vietnam will see their basic monthly salary increase from VND 1.8 million to VND 2.34 million.
Additionally, a 15% increase in retirement pensions and social insurance benefits has been approved. Pensioners who retired before 1995 will receive further adjustments, with monthly pensions raised by an extra VND 300,000 for those earning below VND 3.2 million, and a cap increase to VND 3.5 million for those earning between VND 3.2 million and VND 3.5 million after the adjustment.
In the private sector, the regional minimum wage rose by an average of 6% in July 2024, with new minimum wages set at VND 4.96 million for Region 1, VND 4.41 million for Region 2, VND 3.86 million for Region 3, and VND 3.45 million for Region 4.
Our Vietnam team of expertise can help your business further streamline HR operations.
INDONESIA
Indonesia Launches Golden Visa to Attract Foreign Investors and Skilled Professionals
On 25 July 2024, Indonesia introduced a “Golden Visa” program, offering foreign investors and skilled professionals the opportunity to stay in the country for 5-10 years. There are nine ways to qualify for a Golden Visa.
For individuals, one option is to invest US$2.5 million for a 5-year visa or US$5 million for a 10-year visa. Travelers can also obtain a 5-year visa with a US$350,000 deposit in a state-owned bank or a 10-year visa with a US$700,000 deposit. These deposits can later be used to purchase government bonds or shares on the Indonesia Stock Exchange.
Alternatively, a 5-year visa is available with a US$130,000 deposit and the purchase of an apartment worth US$1 million or more.
Corporate investors can secure 5-year visas for directors and commissioners with a US$25 million investment, or 10-year visas with a US$50 million investment.
Have a business operating from Indonesia? Outsource your payroll to see how much you can save!
TAIWAN
Taiwan Raises Minimum Monthly Wage
The Minimum Wage Deliberation Committee of the Ministry of Labour in Taiwan has approved a raise in the monthly minimum wage from NT$27,470 to NT$28,590, marking an increase of 4.08%.
Additionally, the minimum hourly wage will rise from NT$183 to NT$190.
This decision will be the ninth consecutive wage increase and is set to take effect on 1 January 2025.
Is your business located in Taiwan? Outsource your payroll to see how much you can save!
SOUTH KOREA
South Korea’s Health Insurance Premium Remains Unchanged for 2025
On 6 September 2024, The Ministry of Health has announced that the state health insurance premium rate will remain frozen at 7.09% for 2025, aiming to alleviate financial burdens on citizens. This marks the first instance of a two-year freeze in the health insurance scheme.
Historically, health insurance premiums have been adjusted annually, with only three exceptions in 2009, 2017, and 2024. The decision to maintain the current rate reflects the government’s commitment to supporting individuals during challenging economic times.
South Korea Sets Minimum Wage at KRW10,030 Per Hour for 2025
The Ministry of Employment and Labour has announced that the minimum wage for 2025 will be set at KRW10,030 per hour. This translates to a monthly salary of KRW2,096,270, calculated based on a standard 40-hour work week, totaling 209 hours per month.
This minimum wage applies uniformly across all workplaces, irrespective of the business type, reflecting the government’s commitment to ensuring fair compensation for all workers.
Unfamiliar with South Korea labour laws? Contact our team now!
THAILAND
Thailand’s Tax Reliefs for Environmental, Social and Governance (TESG) Fund
The Thai Cabinet has approved a draft ministerial regulation to enhance tax reliefs for individuals investing in the Environmental, Social, and Governance (TESG).
For investments made between January 2024 and December 2026, the holding period will be reduced to five years, allowing taxpayers to deduct investments up to THB300,000.
Additionally, for investments held for a minimum of eight years, taxpayers can deduct up to THB100,000 per year from their assessable income at a rate not exceeding 30%. This initiative aims to promote sustainable investment practices in Thailand.
Tax Reliefs for Returning Graduates Announced
On 30 July 2024, the Thai Cabinet has introduced tax reliefs for returning graduates with a bachelor’s degree who have worked overseas for at least two years. If these individuals return to Thailand to work by the end of 2025, they will benefit from a maximum personal income tax rate of 17% on their employment income until 31 December 2029.
The tax relief is applicable if the employment is with entities in target industries outlined by specific competitiveness, investment, or development laws.
Additionally, companies and juristic partnerships that hire these returning workers will receive corporate tax reliefs. This includes an extra 50% corporate tax deduction on salaries paid to returning employees, effective from the law’s publication in the Official Gazette.
Thailand Expands Visa-Free Entry and Digital Nomad Visas
In a bid to boost its tourism sector, Thailand has expanded its visa-free entry system to 93 countries and territories, as of 15 July 2024. Visitors from these countries can now stay in Thailand for up to 60 days without a visa, an increase from the previous 57 countries that enjoyed this privilege.
Additionally, Thailand has introduced a new 5-year visa specifically for digital nomads, allowing them to stay for up to 180 days each year, with the possibility of extending for another 180 days. The Destination Thailand Visa (DTV) has been in development for nearly two years and was officially approved by the Thai cabinet in May 2024.
Want to learn more about the Thailand labour law scene? Contact our team now!
PHILIPPINES
Philippines’ VAT Exemption on Medicines Expanded
On 28 August 2024, The Bureau of Internal Revenue in the Philippines has announced an expanded list of medicines eligible for value-added tax (VAT) exemption, following recommendations from the Food and Drug Administration. This update adds five new cancer drugs to the VAT exemption list, along with four medications for hypertension and two for mental illnesses.
However, the revised list also removes two drugs previously exempted for hypertension treatment. This expansion aims to improve access to essential medications for patients, reflecting the government’s commitment to healthcare affordability.
Philippines’ CSC Adopts Flexible Work Arrangements
The Civil Service Commission (CSC) has announced the implementation of a hybird work model for its central and regional offices, allowing four days onsite and one day remote work each week, effective from 1 August 2024. CSC Chairperson Karlo Nograles emphasised that Fridays will be designated as the uniform remote work day, ensuring that all offices continue to provide external frontline services from Monday to Friday, between 8 am to 5pm.
Frontline service offices will maintain onsite staff throughout the week to guarantee uninterrupted public service. This initiative aims to enhance work-life balance while ensuring that public services remain accessible and effective.
Philippines Approves PHP35 Wage Increase for NCR Private Sector Workers
The Regional Tripartite Wages and Productivity Board for the National Capital Region (RTWPB-NCR) has approved a PHP35 daily salary increase for minimum wage earners in Metro Manila. Wage Order No. NCR-25 was signed on 27 June 2024 and published on 1 July 2024, taking effect 15 days post-publication.
Once implemented, the daily minimum wage for non-agriculture workers will rise from PHP610 to PHP645. For workers in agriculture (both plantation and non-plantation), as well as in service/retail establishments with 15 or fewer employees and manufacturing firms with fewer than 10 workers, the daily minimum wage will increase from PHP573 to PHP608.
Is your business based in Philippines? We can help you improve your business’ HR efficiency!
CAMBODIA
Cambodia Declared 5 August 2024 as Public Holiday For Funan Techo Canal’s Inauguration
The Cambodian government declared 5 August 2024 a public holiday to celebrate the inauguration of the Funan Techo Canal.
In a circular issued by Prime Minister Hun Manet, the public holiday allows citizens to join in the festivities marking the completion of this significant infrastructure project. The Funan Techo Canal aims to enhance water management, transportation, and economic development in the region.
Holiday Calendar for Civil Servants, Workers/Employees for 2025
The Royal Government of Cambodia has just issued the Sub-decree No.204 on Holiday Calendar for Civil Servants, Workers/Employees for 2025. It was announced that there will be a total of 22 public holidays for 2025.
Changes in Minimum Wage for Workers/Employees in the Textile, Garment, Footwear, Travel Goods and Bag Industries for 2025
The Ministry of Labour and Vocational Training (MLVT) has just issued the Prakas No. 211/24 on “Determination of Minimum Wage for Workers/Employees in the Textile, Garment, Footwear, Travel Goods and Bag Industries for 2025.”
It highlights the following points:
- The minimum wage for workers/employees in the textile, garment, footwear, travel goods and bags sector for 2025 shall be officially set at USD208 per month.
- The minimum wage for probationary workers/employees is set at USD206 per month.
- After the probation period, the workers/employees shall receive a minimum wage of USD208 per month.
- Other benefits that the workers/employees have received so far shall be kept the same.
- This new minimum wage shall take effect from 1 January 2025.
Have an entity in Cambodia? Simplify your HR operations by outsourcing your payroll!
INDIA
India Launches Electronic Dispute Resolution Scheme (e-DRS)
On 30 August 2024, India has introduced the electronic Dispute Resolution Scheme (e-DRS), allowing taxpayers to file applications online to designated Dispute Resolution Committes (DRCs). Each DRC is required to issue an order within six months of receiving an application.
The Central Board of Direct Taxes (CBDT) has set up 18 DRCs for this scheme. Taxpayers can seek resolution for ‘specified orders’ under section 245MA of the Income Tax Act, provided the proposed variations do not exceed INR1 million and the returned income does not exceed INR5 million. These orders must not arise from searches or surveys.
The DRCs can modify assessments, reduce or waive penalties, and dismiss prosecution proceedings. Applications should be made using Form No. 34BC.
Taxpayers with pending appeals before the Commissioner of Income-tax (CIT) must apply for e-DRS by 30 September 2024. Applications for specified orders passed on or before 31 August 2024 must also be submitted by this date if the appeal period has not expired.
India Launches SHe-Box Portal to Enhance Workplace Safety for Women
On 29 August 2024, the Ministry of Women and Child Development has launched the SHe-Box portal to register and monitor complaints of sexual harassment against women in the workplace.
This centralised platform will serve as a repository for information on Internal Committees (IC) and Local Committees (LC) across government and private sectors, promoting a safer work environment for women in India. The portal integrates digital technology with legal frameworks to ensure timely processing of complaints.
The SHe-Box will be fully operational once all ministries and private organisations update their IC/LC information, with a goal to onboard central ministries’ details by October 2024.
Supporting the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, the portal includes resources like handbooks and training modules in Hindi and English for free download. It is accessible to all women, including those in the unorganised sector and domestic workers.
India Introduces Unified Pension Scheme to Secure Retirement for Central Government Employees
The government has introduced the Unified Pension Scheme (UPS), guaranteeing a minimum pension of INR10,000 per month for central government employees retiring after at least 10 years of service. The scheme will take effect from 1 April 2025.
Under the UPS, retirees will receive 50% of their average basic pay from the last 12 months before retirement, with proportional benefits for those with shorter service periods down to a minimum of 10 years. Pensions will be indexed to inflation.
Existing employees under the National Pension System (NPS) and those opting for Voluntary Retirement can choose to join the UPS, with a final decision once they opt in. The government’s contribution to the pension fund will rise from 14% to 18.5%, while the employee’s contribution remains unchanged. Upon the pensioner’s death, the family will receive 60% of the last pension.
India Clarifies Regulations for Obtaining an Income Tax Clearance Certificate
On 20 August 2024, the Central Board of Direct Taxes (CBDT) has clarified the rules for obtaining an income tax clearance certificate (ITCC) when leaving India.
Per section 230(1A) of the Income-tax Act, the ITCC requirement applies only under specific conditions for individuals domiciled in India. According to Instruction No.1/2004, dated 5 February 2024, a tax clearance certificate is necessary when:
- An individual is involved in serious financial irregulations requiring their presence for investigations, with a potential tax demand.
- A person has direct tax arrears exceeding INR1 million that are not stayed by any authority.
A tax clearance certificate can only be requested after documenting the reasons and receiving approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax.
India Enacts Finance (No.2) Act, 2024
The Finance (No.2) Act, 2024, which implements proposals from the 2024-25 Budget, was enacted on 16 August 2024. Key highlights include:
- A corporate tax cut for foreign companies from 40% to 35%,
- Short-term gains from specific financial assets taxed at 20%, while long-term gains on all assets will be taxed at 12.5%,
- Listed financial assets held for over a year qualify for long-term rates; a two-year holding period applies for non-listed assets,
- Capital gains tax exemption limit increased to INR 125,000 annually, and the tax on angel investors was repealed.
Changes to personal tax brackets are as follows (Under New Tax Regime):
- Income up to INR 300,000 is tax-exempt.
- 5% on income up to INR 700,000.
- 10% on income up to INR 1 million.
- 15% on income up to INR 1.2 million.
- 20% on income up to INR 1.5 million.
- 30% on income exceeding INR 1.5 million.
The standard deduction for salaried employees has increased to INR 75,000. Tax agencies can reassess liabilities only after three years for incomes of INR 5 million or more, with a maximum reassessment period of five years. Additionally, monetary limits for filing appeals in various courts and tribunals have been raised to INR 6 million, and INR 50 million, respectively.
India’s EPFO Updates Rules for Correcting Employee Account Details
The Employees’ Provident Fund Organisation (EPFO) has established new rules for correcting and updating personal details in employees’ Provident Fund accounts. The guidelines, issued in a circular on 31 July 2024, outline the new standard operating procedures (SOP) for these requests.
Under the updated SOP version 3.0, all joint declaration requests, which involve employees requesting modifications authenticated by their employers, must undergo stringent due diligence to prevent impersonation or identity theft. Changes can be made to various personal details, including name, gender, date of birth, parents’ names, spouse’s name, marital status, date of joining, reason for leaving, date of leaving, nationality, and Aadhaar number.
All requests for changes must be accompanied by the necessary supporting documents. Employees can submit joint declaration requests for corrections through the Member e-Sew a portal, but changes can only be made for EPF accounts held with their current employer. Employers are not permitted to modify accounts from previous establishments, and there are limits on how many times personal details can be updated.
India Extends EPS Withdrawal Benefits to Members with Less than 6 Months of Service
On 28 June 2024, the Government has amended the Employees’ Pension Scheme (EPS) to 1995 to provide withdrawal benefits to EPS members with less than 6 months of contributory service. This change is expected to benefit over 700,000 EPS members annually who leave the scheme prematurely.
Additionally, the amendment ensures that each completed month of service is considered when calculating the withdrawal benefit. Consequently, the amount received will now be based on the total completed months of service and the wages on which EPS contributions were made.
NPS Vatsalya Scheme Launched in New Delhi
On 18 September 2024, The Union Finance Minister launched an online platform for subscribing to NPS Vatsalya, release of scheme brochure, and distribute Permanent Retirement Account Number (PRAN) cards to new minor subscribers.
As part of the launch in New Delhi, NPS Vatsalya events will be organised simultaneously at nearly 75 locations throughout the country. Other locations will join the launch through video conference and will also distribute PRAN membership to new minor subscribers in that location.
NPS Vatsalya will allow parents to save for their children’s future by investing in a pension account and ensure long-term wealth with the power of compounding. NPS Vatsalya offers flexible contributions and investment options, allowing parents to make investment of Rs. 1,000 annually in the name of the child, thus making it accessible to families from all economic backgrounds.
India’s Union Budget: Tax Reforms and Reliefs
On 26 July 2024, the Union Budget 2024-25 emphasised the focus on nine identified priorities that expedite the journey towards the goal of Viksit Bharat.
Highlighting the government’s consistent endeavour to simplify taxation, improve taxpayer services, and reduce litigation, the Finance Minister noted that taxpayers have well-received these efforts.
In her budget presentation, the Finance Minister also announced several attractive benefits aimed at providing tax relief to salaried individuals and pensioners who choose the new tax regime.
The Introduction of the Maharashtra Labour Welfare Fund (Amendment) Bill
The Maharashtra Labour Welfare Fund (Amendment) Bill, 2024 was introduced in the Maharashtra Legislative Assembly on 1 March 2024. The Act sets up the Labour Welfare Fund for the benefit of factory workers, and employees in shops and restaurants. The Fund may be used for community education centres and for providing subsidiary occupations to unemployed persons.
Under the Act, employers, employees, and the state government make contributions to the Labour Welfare Fund. An employee whose wages are below Rs 3,000 per month contributes six rupees every six months. Employees with wages above Rs 3,000 per month contribute Rs 12 every six months.
The Bill increases the rate of contribution of employees to Rs 25 every six months for all employees regardless of their income. Consequently, corresponding contributions of the state government and employers will also rise.
Have an entity in India? Simplify your HR operations by outsourcing your payroll!
JAPAN
Changes in Minimum Wage Effective 1 October 2024
Japan’s minimum wage is set to increase by JPY50 across the country. As a result, the average minimum wage in Japan will change from JPY1004 to JPY1054.
Japan Expands the Scope of Recipients of Child Allowances and Changes the Amount of Allowances
As a part of the measures to combat the declining birthrate in Japan, child allowances have been paid to parents with junior high school students up until now. However, from 1 October 2024, the eligibility will be expanded to include high school students, as well.
In addition, the number of payments will increase from three times a year to six times a year.
Need help with your Japan payroll? Contact our team now!
MYANMAR
Myanmar Increases Minimum Wage
Myanmar has introduced significant changes to its minimum wage, including new allowances for public and private sector workers.
The Committee for Setting the Minimum Wage under the Government of Myanmar issued Notification No. 1/2024, which raised the daily minimum wage from MMK 5,800.00 to MMK 6,800.00 for an 8-hour workday, effective 1 August 2024.
The wage was initially set at MMK 4,800.00 in 2018 and increased to MMK 5,800.00 in October 2023.
This wage increase does not apply to small businesses with fewer than 10 employees, family businesses, or similar enterprises.
Need help with your Myanmar payroll? Contact our team now!
AUSTRALIA
Australia’s ‘right to disconnect’ Law Now in Effect
Australia’s new ‘right to disconnect’ law came into effect on 26 August 2024 for medium and large businesses, with small businesses (fewer than 15 employees) following on 26 August 2025.
Employees can refuse to respond to employer contact outside of working hours, until it’s deemed unreasonable. The Australian Labour Court and Fair Work Commission (FWC) will assess reasonableness based on factors like the employee’s role and the nature of the contact.
Employers who breach a Commission order regarding the right to disconnect may face penalties of up to $18,780 for individuals and $93,900 for corporations per violation.
Need to simplify your HR and Payroll? Click here to learn more.
NEW ZEALAND
New Zealand Introduces New Seasonal Work Visa Sub-Category
On 19 August 2024, the New Zealand government announced a new subcategory of the Specific Purpose Work Visa to assist employers facing seasonal peaks. To qualify, the role must be related to seasonal activities, and applicants need at least four months of relevant experience, starting on or before 31 May 2025.
Employers are required to advertise the position for a minimum of two weeks before hiring foreign workers and must pay at least NZ$29.66 per hour for at least 30 hours per week.
The role cannot exceed nine months in duration, and employers must be accredited under the Accredited Employer Work Visa instructions.
Notably, roles typically filled by Recognised Seasonal Employer workers in horticulture, viticulture, and fishing crew work are excluded, as they fall under different visa categories.
New Zealand Increases Cap on RSE Scheme Workers
The New Zealand government announced an increase in the cap for the Recognised Seasonal Employer (RSE) Scheme to support the growth of the horticulture and viticulture industries. The cap will rise by 1,250 workers, bringing the total to 20,750 for the 2024-25 season.
Key changes include a requirement for employers to provide an average of 30 hours of work per week over a four-week period. Additionally, the previous pause on accommodation cost increases will be lifted, and the stipulation to pay RSE workers 10% above the minimum wage will now apply only to experienced workers, reflecting their productivity.
Need help with your New Zealand payroll? Contact our team now!
Want a summary of the Q4 2024 APAC Labour Law Insider?
Watch Bite-Sized APAC Labour Law Insider Updates by Links’ Group Managing Director, Scott Thomson, below:
Want an innovative HR experience? Learn more about Links’ award-winning services!
If you have any questions with regards to the content in our Labour Law Insider or Links International’s HR Outsourcing services, please contact Bella Khan at bella.khan@linksinternational.com or Lynette Liew at lynette.liew@linksinternational.com.
If you’re interested in receiving our Labour Law Insider newsletter every quarter, please drop an email to marketing@linksinternational.com to be added to our mailing list.
Disclaimer: This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. This post contains links to other websites owned by third parties. The content of such third-party sites is not within Links International’s control, and we cannot and will not take responsibility for the information, content or personal information collected by third-party sites.