Onboard Q2 2017 – Latest Visa and Payroll updates across Asia

Please see below our latest issue of Onboard, Links International’s quarterly update that keeps you aware of significant payroll and visa developments across the region.



Hong Kong judge rules in favour of employee benefits for same sex couples

A homosexual civil servant in Hong Kong has won a legal battle with his employer resulting in his husband being entitled to the same benefits as his heterosexual colleagues’ spouses. 
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Default Investment Strategy standardises MPF investment arrangements

The Default Investment Strategy (DIS) was launched on 1 April 2017, mainly designed for members who do not know how or do not wish to manage their MPF investment. The DIS will standardise the default investment arrangements across all MPF schemes, as well as help to address concerns about difficulties in choosing funds and high fees, therefore providing better retirement protection to scheme members.
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Statutory Minimum Wage increased

The Statutory Minimum Wage (SMW) has been raised from HK$32.5 per hour to HK$34.5 per hour, with effect from 1 May 2017. The monetary cap on the requirement of employers keeping records of the total number of hours worked by employees has also been revised from HK$13,300 per month to HK$14,100 per month.
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Contractual working hours and overtime pay required for workers earning HK$11,000 or less.

The Executive Council has passed a proposal to make it compulsory for employers to pay workers overtime wages at rates no less than their regular salaries, only if they earn HK$11,000 or less per month, rather than standardising working hours for all employees in Hong Kong. Contracts must be signed to specify working hours and overtime compensation.
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New proposal to abolish MPF offsetting failed to reach consensus

As Chief Executive CY Leung reaches the end of his administration, he has tried to fulfil his election promise that he made five years ago to abolish MPF offsetting. However, at the most recent Executive Council meeting, his proposal failed to reach consensus, as the labour and business sectors were not happy with what the government had proposed. 
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Social insurance payment limits revised in Shanghai

The maximum medical insurance fund payment limit was revised from RMB420,000 to RMB460,000, with effect from 1 April 2017. The upper and lower limits of the social insurance contribution base were also increased, with the lower limit raised to RMB3,902 and the upper limit to RMB19,512.
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Minimum wage increased in Shanghai

The Shanghai government has raised the city’s minimum monthly wage by five percent, from RMB2,190 to RMB2,300, with effect from 1 April 2017. The minimum hourly wage has also been raised from RMB19 to RMB20. 
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CPF interest rates remain unchanged 

Central Provident Fund (CPF) members will continue to earn annual interest rates of up to 3.5% on their Ordinary Account (OA) monies, and up to 5% on their Special and Medisave Accounts (SMA) monies in the third quarter of 2017. CPF members aged 55 and above will earn an additional 1% interest on the first SGD30,000 of their combined balances.
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Establishment of Singapore’s Employment Claims Tribunal 

The Employment Claim’s Tribunal (ECT) and the Tripartite Alliance for Dispute Management (TADM) have been set up to provide employers and employees with a way to resolve salary-related disputes between employers and employees, with effect from 1 April 2017. 
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Malaysia to introduce employment insurance scheme 

Malaysia has plans to introduce a mandatory employment insurance scheme in 2018 to protect workers. The new scheme is expected to launch early next year. Organisations and employees will have to contribute to a fund that will be used to pay benefits to to those who are retrenched or whose employees are made bankrupt or abscond.
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New work permit regulations

The Ministry of Workforce in Indonesia recently issued a new requirement whereby every foreigner who applies for limited stay visa or work permit shall have to submit proof that their bank account amounts to a minimum of USD1,500 or equivalent.
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BPJS Ketenagakerjaan to cover informal-sector workers

The Social Security Administration Body for Employment (BPJS Ketenagakerjaan) has announced that it would officially start insuring workers without a regular salary as of 1 July. This includes workers from informal-sector workers such as motorcycle taxi drivers and street vendors, to self-employed professionals such as doctors and notaries. 
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FSS launched ‘Electronic Filing Service’

Macau’s Social Security Fund (FSS) launched the ‘Electronic Filing Service’ on 1 November 2016. Employers need to log in to the Electronic Filing System using their ePass accounts to report the employment information of their employees who belong to the obligatory system, enroll their employees as beneficiaries of the FSS, download Contribution Payment Advice, view the employment information of employees and the related payment record, and transmit the data to the FSS through electronic transmission mode. 
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All employed earners can set up IRP account

From July 2017, all employed earners, including self-employed workers, will be allowed to set up an individual retirement pension (IRP) account. This is a type of retirement pension plan that enables the holder to voluntarily accumulate retirement savings with his/her own money and it also offers a tax deduction of up to KRW 7,000,000 per year for contributions paid by pension holders themselves. 
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Korean government plans increase to minimum wage

The new government in Korea is planning a steep increase to the minimum wage. Under a plan announced by a presidential committee on jobs, Korea’s hourly minimum wage, which is currently pegged at KRW 6,470, is set to rise by an annual average of 15.7% over the next three years to reach KRW 10,000 by 2020. 
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Accident and occupational disease insurance premium rate decreased

According to Decree No 44/2017/ND-CP issued by the Vietnam Government, employers shall only pay occupational accident and occupational disease insurance premiums at the rate of 0.5% of the salary fund, effective 1 June 2017. This rate has decreased from the previous 1%.

Basic wage increase

The Vietnamese Government issued Decree 47/2017/ND-CP on 24 April 2017, increasing the basic salary for State Employees to VND1,300,000 per month, up from VND1,210,000, with effect from 1 July 2017.
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Overtime limits set to double

The Ministry of Labour, Invalid and Social Affairs has proposed to revise Vietnam’s 2012 Labour Code to increase the overtime limit from 200 hours to 400 hours per year. The current overtime limit of 200 hours per year, or 30 hours per month, is much lower than other countries in Southeast Asia, so the proposal aims to raise the competitiveness of the country’s labour market.
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Revision of Personal Income Tax structure

With effect from 1 January 2017, Thailand’s Personal Income Tax structure has been revised. The revisions include: expense allowance for taxable income increased to 50% of assessable income not exceeding THB100,000; personal allowance increased to THB60,000; non-working spouse allowance increased to THB60,000; child allowance increased to THB30,000 per child; and education expenses cancelled. 
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King of Thailand announces royal command

His Majesty King Maha Vajiralongkorn Bodindradebeyavarangkun has announced a royal command regarding revisions to the Revenue code with effect from 26 January 2017. 
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Japanese government to introduce work incentives

The Japanese government is set to introduce a rewards system to incentivise employees to take more time off and improve the work-life balance of average people, as Japanese workers in general take less than 50% of their allocated annual paid holidays.
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Japanese pension refund for foreigners

Foreign passport holders in Japan who have been employed for more than 6 months and contributed to the Japanese public pension, upon leaving the country, can choose to either leave their pension contributions in Japan in case they choose to return, or claim for a lump-sum withdrawal payment of up to 36 months’ worth of contributions. 
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Stricter rules on working visas to be introduced

Australian Prime Minister Malcolm Turnbull has said that the 457 visa programme, which is used mainly to hire foreign workers in the restaurant, IT and medical industries, will be abolished to prioritise the recruitment of Australian nationals. Two new temporary visas will replace the 457 visa, which will carry additional requirements and draw from a smaller list of eligible professions.
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Penalty rates for Sunday and holiday work to be cut

The Fair Work Commission (FWC) has announced that Sunday penalty rates and holiday penalty rates paid in the retail, fast-food, hospitality and pharmacy industries will be reduced from existing levels. Most of the pay cuts will take effect from July, whilst others will be phased in over time.
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Highest minimum wage increase in years

The Fair Work Commission (FWC) has announced a 3.3% increase to minimum wages, effective from 1 July 2017. This takes the minimum wage to AUD694.90 per week, or AUD18.29 per hour. 
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Changes to parental leave

There have been a few changes to parental leave, effective from 1 June 2017. Firstly, employees who want to receive parental leave payments can now use their paid leave (annual leave, alternative days, special leave, etc.) first. Another change means that a parent with a preterm baby has more flexibility around returning to work and parental leave payments. 

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