Onboard Q3 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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Major updates in HK Labour and Welfare

Plans to abolish the “offsetting” arrangement under the Mandatory Provident Fund Scheme within the current term of the Government, with a two year implementation period after the legislation is amended. The Government will enhance the support for employers and assist the micro, small and medium-sized enterprises in making preparation for the change.

Extend the statutory maternity leave to 14 weeks, where the employers can apply for reimbursement of the additional expenditure on four weeks’ statutory maternity leave from the Government; this maternity leave extension will take effect immediately for all female employees of the Government.

Plans are also underway to increase statutory paternity leave from three days to five days as soon as possible.

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Amendments to Individual Income Tax

China’s top legislature adopted an amendment to the Individual Income Tax Law, raising the minimum threshold for paying personal income tax from 3,500 yuan to 5,000 yuan per month, or 60,000 yuan per year. The new tax threshold set to take effect on Oct 1, 2018.

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No work permits needed for Taiwan, Hong Kong, and Macau residents

New legislation announced by the State Council on August 3, 2018 states that residents of Taiwan, Hong Kong, and Macau no longer require work permits to work in mainland China.

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Adjustments to 2019’s Minimum Wage

In Taiwan, there will be an adjustment on the minimum wage for 2019, starting on January 1. The basic wage will be adjusted from the current NT$140 per hour to NT$150 per hour and NT$22,000 per month to NT$23,000 per month.

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Employment Act to remove the salary cap

Amendments are being proposed by the Employment Act to remove the salary cap to cover more people, including professional, managers, executives and technicians, who make up 56% of the local workforce.

With the lifting of the salary cap, an additional 430,000 PMEs will come under the protection of the Act. The exceptions are public servants, domestic workers and seafarers who are covered by other Acts due to the nature of their work.

The Ministry of Manpower (MOM) also proposed to raise the salary cap on the protection for hours of work and overtime pay to more workers. The proposed changes want to raise the salary cap for white-collar workers to S$2,600, which will extend protection to half of Singapore’s workforce. On overtime pay, the salary cap for white-collar workers will be revised upwards from S$2,250 to S$2,600, benefiting about 100,000 of the office workers.

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New requirements for Non-Malaysian Work Permit holders 

From 1 October 2018, all first time non-Malaysian Work Permit holders will be required to attend the Foreign Worker Settling-In Programme (FW SIP). A phased approach will be adopted, starting with Work Permit holders In the Construction sector from 1 October 2018. For the other sectors, it will be progressively rolled out.

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Work permits to China no longer needed

Formally implemented on September a circular to abolish 11 administrative approval items. According to the announcement, residents from Hong Kong, Macau and Taiwan (HMT residents) no longer need to obtain employment permits to work in China.

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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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Jakarta looking to raise the minimum wage 

The city government in Jakarta is looking to raise the minimum wage by 8.03% for 2019. However the business community has reportedly proposed a lower minimum wage increment of 4.5-5% due to the difficult economic situation.

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New regulations regarding 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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100 hour cap on overtime work

In Japan, the bill for overtime work was passed in June. The new legislation puts a cap on the amount of overtime work allowed in a month. The maximum hours of overtime work, is capped at 100 hours per month.

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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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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.

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 our Onboard or Links International’s HR Outsourcing services, please contact Zac Ma at zac.ma@linksinternational.com or  Bella Khan at bella.khan@linksinternational.com

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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.