Onboard Q2 2018 – Updates on Asia’s Visa and Payroll

Below is the latest issue of Onboard, a quarterly update by Links. Onboard covers major payroll and visa developments across Asia. It is designed to get our readers updated at-a-glance. For more news and insights of the market, make sure to subscribe to our blog so you don’t miss out on anything.

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Financial Secretary announces Hong Kong Budget

Reached initial consensus on scrapping the MPF offsetting mechanism. The government initially proposed to provide a subsidy of HK$17.2 billion over a period of 12 years to subsidize employers. Employer representatives argued that the transitional period of 12 years is too short, demanding the government to make a long-term financial commitment to paying for a portion of the severance and long-service payments, and a review of the new implementation after 15 years.
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Shanghai’s minimum wage to rise on 1 April

From 1 April 2018, the statutory minimum wage of Shanghai has increased by 5.2 % to RMB 2,420 per month. The hourly rate has been increased from 20 yuan to 21 yuan per hour.

In addition, the average monthly salary (used for the purposes of calculating social insurance and severance payments) has been adjusted. The figure now is RMB 7,172, and accordingly, the minimum monthly contribution to social insurance is RMB 4,279 (comprising RMB 449.4 for the employee and RMB 1,347.9 for the employer), and the maximum monthly contribution is RMB 21,396 (RMB 2,246.7 for the employee, RMB 6,739.8 for the employer). The Employee and the Employer contribute 10.5% and 31.5%, respectively, to the social insurance.
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Amendments to Labor Standards Act

Amendments to certain articles of the Labor Standards Act were announced by the President on January 31 and went into effect on March 1, 2018. 

These revisions uphold the principles of security and flexibility, insisting on “four immovable” labor rights for workers. In consideration of actual workplace needs, the amendments have also added “four flexibilities”. That there should in principle be at least consecutive 11 hours between a worker’s shifts was formally initiated.
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Singapore government increases funding for flexible work schemes

Singapore is enhancing the Work-Life Grant as a way to help women manage responsibilities in both career and childcare. The Work-Life Grant, which started in 2013 and is due to expire. However, it will be extended and enhanced from 1 July.

Key enhancements include:

  • Simplified application criteria
  • Increasing the coverage of the employer payments
  • Higher grant per employee

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Malaysian government considers increasing minimum wage

A new minimum wage for the private sector is being discussed, if approved it will be implemented by August. This will replace the current blanket regulation for all industries.

The Pakatan Harapan government’s pledge to increase the minimum wage to RM 1,500 will be done in stages, with the first quantum of increase to be decided by the Cabinet.
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Law on activities performed by employment agencies

The law proposal in Macau ruling on the activities performed by employment agencies in the Macau SAR was unanimously. The law suggests that workers requesting employment placement services from such agencies can be charged a fee of no more than 50 per cent of their base salary, which can be charged only once and 60 days after the beginning of the work relationship.
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FSS calls on old-age and disability pension beneficiaries to provide the proof of life

Macau’s Social Security Fund (FSS) stated that about 108,000 old-age and disability pension beneficiaries must provide the proof of life before the end of March, otherwise the related benefit will be suspended from April onwards.
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Considerations on decreasing corporate income tax

Plans to reduce Vietnam’s corporate income tax (CIT) was recently announced by Vietnamese Prime Minister, Nguyen Xuan Phuc.

The Ministry of Finances’s current draft on SME tax reductions details two reduced rates of CIT that are to be applied in lieu of Vietnam’s prevailing CIT rate of 20 percent.
15 percent: applied to micro enterprises
17 percent: applied to small enterprises
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Increase to common minimum wage in Vietnam

The common minimum wage has been increased to 1,390,000 VND per month, with effect from 1 July 2018. Specifically, the changes have resulted in an increase to the maximum caps for calculating Social Insurance and Health Insurance payments, and therefore increasing the potential payments by employees and employers for these insurances.
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Decrease on income tax for small & medium sized enterprises

Indonesia will cut the final income tax rate for small and medium-sized enterprises by half, to 0.5 percent of their annual sales, in a move to help businesses manage their cash flow and expansion. The new regulation is effective starting 1 July 2018.
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Possibility of working without permit

On March 27, 2018, the Emergency Decree on Non-Thais’ Working Management was issued. “Work” is now defined as “an engagement of any profession, with or without employer, but excluding business operation of a licensee under the law governing foreigners’ business operation” in Decree No. 2. In addition, Decree No. 2 now provides for exceptions to the mandatory work permit application requirement as well as other revisions of note.
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Cambodia is moving to regulate crypto-currencies

A joint statement issued on June 19 by the National Bank of Cambodia (NBC), the Securities and Exchange Commission of Cambodia (SECC), and the General-Commissariat of National Police said ‘the propagation, circulation, buying, selling, trading, and settlement of crypto-currencies without obtaining a license from competent authorities’ are illegal activities.
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Government setting new minimum wage

Myanmar increased the country’s daily minimum wage for an eight-hour work day from Kyat 3,600 (US$2.65) to Kyat 4,800 (US$3.54). The revised wage came into effect on 14 May applying to all businesses with 10 or more employees irrespective of the location or type of work.
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New minimum wage rate in effect starting July 12

The Department of Labor and Employment (DOLE) Antique field office has announced that the new minimum wage rate for Western Visayas will take effect this July 12.

The new daily minimum wage rates for the non-agriculture/ industrial/commercial sector employing more than 10 workers would be PHP365 from the previous PHP323.50 while for those employing 10 workers and below it would be PHP295 from PHP271.50.

For agriculture under the plantation sector, it would be PHP295 from PHP281.50 and non-plantation will PHP295 from PHP271.50.
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Tax credit revisions

Revision and expansion of tax credits for salary growth. The tax credits given for increases in salary payments by employers (tax credits for salary growth) will be applicable to taxable years beginning on or after 1 April 2018 unless otherwise specified.
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South Korea labour code overhaul cuts maximum work week 

South Korea officially dropped its maximum workweek to 52 hours on July 1. The new law is in effect for businesses with more than 300 employees, state-run agencies and government offices. Those who make their employees work more than 52 hours weekly face up to two years in prison or a fine of up to 20 million won (S$24,484).
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Australian businesses urged to prepare for payroll reform 

Single Touch Payroll is a reporting change for employers which started on 1 July 2018 for employers with 20 or more employees.

Payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information will be reported from business’ payroll solution each time a payment is made to employees.
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New Zealand

Extended parental leave starting July 1

Paid parental leave is extending from 18 weeks to 22 weeks from 1 July 2018 for babies born or expected to be born on or after 1 July 2018.

This also means the number of keeping-in-touch hours is increasing from 40 hours to 52.
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Working for Families tax credit

A higher payment rate and widening of the eligible income range is being introduced from 1 July 2018.
Existing Working for Families customer you received a new Notice of Entitlement in June that will indicating the new payment amount.
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If you have any questions with regards to the content in Onboard or Links International’s HR Outsourcing services, please contact Bella Khan at bella.khan@linksinternational.com

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