Onboard- APAC 2022 Q3 Legislation Update

LegCo Approves Labour Bill to Abolish MPF Offsetting Arrangement

Hong Kong Legislative Council passed the Employment & Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 (Bill) on 9 June 2022.

In effect, employers will be prohibited to use employees’ pensions to cover severance payments and long service payments.

The abolition of the offsetting arrangement has no retrospective effect and will be implemented in tandem with the full implementation of the eMPF Platform of the Mandatory Provident Fund Schemes Authority in 2025.

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Major Amendments to Employment Ordinance 2022 Under Anti-epidemic Measures Comes Into Effect on 17 June 2022

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Amendments to Employment Ordinance (EO) 2022 came into effect on 17 June 2022. Major amendments include:

Security Assessment Rules For Cross-border Data Transfer

Cyberspace Administration of China (“CAC”) released the final version of Measures for the Security Assessment of Outbound Data Transfer (the “Assessment Measures”), set to come into effect on 1 September 2022.

The measures apply to the security assessment for providing overseas important data or personal information that is collected and generated within mainland China. A security assessment should be carried out under the following scenarios:

While Assessment Measures come into effect on September 1, 2022 (the “Effective Date”), Article 20 stipulates retroactive application, if such transfers do not comply with the Assessment Measures, rectification should be completed within 6 months of the effective date.

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Shanghai Rolls Out Unemployment Rate Control Subsidy

Businesses that have maintained their employment layoff rate at 5.5% can apply for 600 yuan (US$90) of subsidies per employee, capping at 3 million yuan (US$449,760) for each enterprise.

Application for this subsidy can be submitted to employment service organisations before the end of the year.

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Shanghai Unveils Subsidy to Boost Employment

Businesses and social organisations are also eligible to receive grants for employing people who have been registered as unemployed for over three months, as well as college graduates.

They can get a 2,000-yuan (US$30) subsidy for signing a labour contract with each new worker who qualifies under the scheme if they employ them for at least a year and pay their social security premiums.

This subsidy will be processed automatically and will not require any applications, legible enterprises will receive the subsidy via their social security accounts.

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Announcement on the Upper and Lower Limits of Shanghai’s Social Security Payment Base in 2022

The 2021 monthly average salary for employees in Shanghai municipality is RMB 11396.
From July 1st, the new cap for the social security base in Shanghai will be RMB 34188/month; while the minimum will be RMB 6520/month.

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Beijing Implements New Policy Package to Stabilize Employment

Beijing rolls out a 30-point plan to stabilise employment and increase relevant subsidies for college graduates and other important target groups.

The 30-point plan offers incentives for businesses to hire more people, promotes flexible employment, and pushes workers to choose jobs near where they live.

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Hunan Province Launches Maternity Leave Extensions

Hunan launches a new provincial policy offering working extensions for working mothers.

The new policy allows mothers to apply for more days of leave up to when the child turns one. Salary awarded during the extended leave will be determined through negotiation between employers and workers.

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Retirement & Re-Employment Age Increased to 63 and 68 Respectively

From 1 July 2022, the minimum retirement age is increased from 62 to 63 years. Simultaneously, the re-employment age will be increased from 67 to 68.

Employers must offer re-employment to eligible employees who turn 63, up to age 68, to continue their employment in the organisation.

The raises are part of amendments to the Retirement and Re-employment Act, to establish the maximum possible statutory retirement and re-employment ages at 65 and 70 by 2030.

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Introduction of Popular Places Pass for Migrant Workers Residing in Dormitories

From 24 June 2022, migrant workers residing in dormitories will have to apply for a Popular Places Pass instead of an Exit Pass to visit the four designated popular locations (Chinatown, Geylang Serai, Jurong East, and Little India) on Sundays and public holidays.

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Revised Entry Requirements for Construction, Marine Shipyard and Process (CMP) Sectors Work Permit Holders (WPHs)

Singapore, we will be phase out the mandatory 2-day Pre-Departure Preparatory Programme (PDPP) requirement starting from 1 July 2022.

Existing PDPP providers for the Construction, Marine Shipyard and Process (CMP) Sectors will be expected to put in place Business Continuity Plans (BCP) for the PDPP regime in the event that the PDPP is reinstated (e.g. public health risks due to the emergence of new variants of concern).

All non-Malaysian male Work Permit Holders (WPHs) from the CMP sectors holding an In-Principle Approval (IPA) will still be required to undergo the residential onboarding programme at the MOM’s Onboard Centres upon their arrival in Singapore. Employers whose WPHs are required to undergo the Onboard programme must ensure that they have booked a slot at the Onboard Centre through the Onboard Booking System before their arrival in Singapore.

Entry requirements for vaccinated non-Malaysian Construction, Marine Shipyard and Process Sectors Work Permit Holders:

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Singapore Government to Provide Businesses and Workers With New S$1.5BN Support Package

Singapore’s Ministry of Finance announced a S$1.5bn support package to provide targeted relief for businesses, workers, as well as households.

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Key relief policies include:

A) Increase in Co-funding Share for 2022 Progressive Wage Credit Scheme (PWCS) Support

The government’s co-funding share for 2022 progressive wage credit scheme (PWCS) support will be increased from 50% to 75% for wages up to S$2,500 (first tier), and from 30% to 45% for wages above S$2,500 up to S$3,000 (second tier). All other existing scheme parameters remain unchanged.

B) Current Jobs Growth Incentive Extended Till September 2022

Businesses can continue to benefit from the current jobs growth incentive (JGI) till September 2022 for the hire of

• mature job seekers who have not been working for at least six months;
• persons with disabilities;
• ex-offenders.

MOM has additional plans to extend the JGI to March, more details of the JGI extension will be provided closer to the current scheme’s expiry in September 2022.

C) Foreign Worker Levy Waiver for Chicken Slaughterhouses

There will be a one-month foreign worker levy waiver for Singapore’s 11 chicken slaughterhouses to support firms affected by the chicken export ban.

D) Energy Efficiency Grant

There will be an energy efficiency grant for local SMEs in the

• food services;
• food manufacturing; and
• retail

sectors with up to 70% support to adopt energy-efficient equipment in pre-approved categories.

E) Enterprise Financing Scheme (Trade Loan)

Trade Loan’s maximum loan quantum increased to $10m from 1 July 2022 to 31 March 2023; extended 70% risk-share during this period.

F) Enterprise Financing Scheme (Working Capital Loan)

SME Working Capital Loan’s maximum loan quantum increased to $500,000 from 1 October 2022 to 31 March 2023, after the Temporary Bridging Loan Programme expires on 30 September 2022.

Amendments to the Employment Act to Take Effect on 1 September 2022

Major changes to the Employment Act are to be enforced on 1 September 2022. The Amendment Act will introduce significant changes to the Employment Act 1955 (the ‘Principal Act’).

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Major amendments include:

A) Maternity Leave & Protection

Paid maternity leave is increased from 60 to 98 calendar days.

The amendments also provide protection against dismissal during pregnancy or in the event of complications following birth aside from in the case of:

• Engaged in misconduct,
• Willfully violated a condition of the employment contract, or
• The company has ceased its operations.

B) Paternity Leave

Employees who are married men are entitled to 7 days of paid paternity leave (for up to five births).

C) Sexual Harassment Notice

Going forward, employers are required to prominently display a notice to raise awareness of sexual harassment in the workplace.

D) Maximum Weekly Working Hours

The maximum weekly hours of labour required of Malaysian employees will be cut from 48 to 45 once amendments take effect.

E) Flexible Working Arrangements (FWA)

The amendment to the Employment Act 1955 introduces Flexible Working Arrangements (FWA) to employees in the country, allowing them to apply accordingly with their respective employers.

Upon receiving an application, employers must provide a written response on the approval/ rejection of the application within 60 days. In the case of a rejection, employers must provide relevant reasoning.

Update to Visas, Passes and Permits Application

Malaysia has updated their procedures for visas, passes, and permits.

Effective 20 June 2022, all transactions involving visas, passes, and permit applications will be processed in another office of the Department, called the UTC Kuala Terengganu branch.

Such applications will no longer be processed at the Department’s office at Wisma Persekutuan.

Reduced Social Security Contribution Rate for Employer & Employee from May to July

The cabinet approved the reduction of the Social Security contribution rate from 5% to 1% for both portals effective from May to July. This will revert back to the normal rate in August which is 5% for each portion (employee & employer) in 2022.

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Minimum Wage Increases by 6%

Starting 1 July 2022, the Minimum Monthly Wage for employees in Vietnam across the 4 regions will increase, varying from US$140 to US$202. The increase in minimum monthly wages is as follows:

• Region I – VND 4,680,000 (US$202)
• Region II – VND 4,160,000(US$179)
• Region III – VND 3,630,000 (US$157)
• Region IV – VND 3,250,000 (US$140)

In accordance, the minimum hourly wages for the relevant regions will be as follows:

• Region I – VND 22,500 (US$0.97)
• Region II – VND 20,000 (US$0.86)
• Region III – VND 17,500 (US$0.75)
• Region IV – VND 15,600 (US$0.67)

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Social Insurance Statutory Contribution Rate Reverting Back to 17.5%

The reduction in employer contribution to Statutory Social Insurance from 17.5% to 17% ends on 31 June 2022. Employers will need to contribute the Statutory Social Insurance at 17.5% from July onwards.

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Government Reminder to Submit Report on Employment of Foreign Employees in Ho Chi Minh

On 30 May 2022, the Department of Labour, Invalids and Social Affairs of Ho Chi Minh City (HCMC DOLISA) issued Official Letter 18502/SLDTBXH-VLATLD, reminding
employers to submit reports on the employment of foreign employees and foreign employee information collection forms.

• Reporting form: Form No. 07/PLI in Appendix I to Decree 152/2020/ND-CP
• Deadline: by 4 July for semi-annual reports and by 5 January for annual reports
• Submission method: online via https://forms.gle/JKW4gGgKUQfsrJYcA

Use of Electronic Personal Income Tax Withholding Certificate

The government issued guidelines on 29 June 2022 on the use of electronic Personal Income Tax withholding certificates from 1 July 2022

Implementation of Labour Inspection Self-Declaration via Automation System

As noted by the Ministry of Labour and Vocation Training (MLVT), all companies will be obligated to make a labour inspection self-declaration in the automation system 2 times a year, end of June and December via the website: https://sicms.mlvt.gov.kh effective from 1 June 2022.

Implementation of the Social Security Pension Scheme for Persons Under the Provisions of the Labour Law

The Social Security Pension Scheme for persons under the labour law is scheduled to be implemented from 1 July 2022 onward.

A summary of the implementation of the Pension Scheme is below:
1- Contribution Rate:

• 1st year – 5th year : 4% (2% employee + 2% employer)
• 6th year – 10th year : 8% (4% employee + 4% employer)
• 11th year onward: the contribution rate will increase 2.75% every 10 years.

2- Contribution Amount:

• Minimum: 2% of 400,000 KHR = 8,000 KHR (Approximately: USD 2.00)
• Maximum : 2% of 1,200,000 KHR = 24,000 KHR (Approximately: USD 6.00)

Implementation Date of the Contribution Payment for Pension Scheme by the Obligation and Voluntary

Prakas #170/22 from MLVT dated 5 Jul 2022.

The Pension Scheme’s compulsory and voluntary pension contributions will take place from 1 October 2022.

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Launch of Injury Allowance

Starting 4 July 2022, the South Korean government will kick off a pilot project on the injury allowance.

This project divides 6 regions into 3 groups, applies different models, and compares and analyses the size and financial requirements of support recipients for each model.

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Increased Maximum Contribution of Statutory National Pension

Starting 1 July 2022, the monthly max contribution ceiling of the statutory national pension for employers and employees will increase from KRW235,800 to KRW248,850 each.

Higher Contribution Rates for Statutory Employment (Unemployment) Insurance

The employment insurance rate will be raised by 0.1% each for employees and employers as summarized in the following:

The statutory social insurance rates are in effect from July 1, 2022, as follows Social Insurances:

Amendment of Childcare and Family-care Leave Act

This new Childcare at Birth Leave will be applicable to male employees starting 1 October 2022. It is an addition to the existing government-paid childcare leave entitlements which can now be taken in one or two separate instalments.

The amendment will give male employees 4 weeks of leave to be taken within 8 weeks of the child’s birth. The Childcare at Birth Leave will be payable by social security at the same rate as maternity leave (67% of covered pay).

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Expansion of Social Insurance Coverage

The number of employees required to be covered by social insurance for part-time and other short-time workers was 501 or more, but from 1 October 2022 this number will be reduced to ‘101 to 500’.
Specific conditions for part-time workers are as follows.

1. More than 20 and less than 30 hours of scheduled working hours per week.
   These are the contractually prescribed working hours and do not include overtime hours, etc.
   However, if the actual working hours are 20 hours or more per week for two consecutive months and are expected to continue, the employee will be covered from the third month.
2. Monthly wages of JPY 88,000 or more.
   This refers to basic wages and allowances and does not include overtime, bonuses, temporary wages, etc.
3. Expected to be employed for at least two months.

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Increased National Minimum Wage and Minimum Award Wages

The Fair Work Commission has increased the National Minimum Wage and minimum award wages. Starting From 1 July 2022, the national minimum wage is $21.38 per hour or $812.60 per 38-hour week (before tax). Casual employees covered by the national minimum wage also get at least a 25% casual loading.

Modern award minimum wages will increase by no less than 4.6 per cent, with modern award rates below $869.60 per week attracting an increase of $40 per week and modern award rates above $869.60 per week attracting an increase of 4.6 per cent, to commence from 1 July 2022.

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The Super Guarantee Rate Increases From 1 July 2022

On 1 July 2022, the super guarantee (SG) rate will increase from 10% to 10.5%.

The Norfolk Island transitional SG rate will increase from 6% to 7%.

The rate you’re required to use depends on when your employee is paid, not when the income is earnt. This means the new rate will need to be applied to any payments of salary or wages made on and after 1 July 2022, even if some or all of the relevant pay period is before 1 July.

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