Differences in Employment Across Asian Countries | CXC Asia

Some Key Differences in Employment Across Major Asian Countries

If you’re a manager or business owner anywhere in Asia then you’ll know that employment regulations can sometimes be overly complex and confusing. Especially when you cross a border.

With each new country comes a whole new set of rules, government mandates and traditions that you have to understand and implement. Otherwise penalties and problems may quickly follow.

For example, Vietnam’s labour regulations are considered very prescriptive yet employee friendly. Other countries less so. Whilst in Japan, Karoshi – or death by work – is a thing.

In Singapore, a modern westernised society depending heavily on imported labour, the employment regulatory framework, for Singapore nationals and foreign workers, is well-developed and closely monitored by the nation’s  Ministry of Manpower (MOM). The Ministry’s mandate covers everything from work passes to employment practices, conditions and entitlements, workplace health and safety, employer and employee education and employment statistics and publications.

Singapore Employment Law: A model for Asia?

Singaporean society places great importance on work. With good reason, as hard work, an entrepreneurial spirit and a can-do attitude have helped it become one of the most prosperous countries on earth. It’s also a cultural melting pot and has an economy that relies heavily on immigration and foreign workers. As a result, there are rules and regulations for nearly everything, and its employment laws are considered some of the most detailed – and prescriptive – in Asia.

Just some of the employee entitlements and regulations currently in force in Singapore?

Hours of Work: In 2020, the average paid hours worked a week per employee in Singapore was around 44 hours per week. Currently there are no restrictions on working hours under Singapore law

Working on Sundays: Employees are allowed to work on Sundays, unless it is the designated ‘rest day’ which is mandatory for employers to provide. An employer cannot compel an employee to work on a rest day

Protection and Anti-discrimination: Employees are protected against wrongful dismissal. The Ministry of Manpower (MOM) lists dismissal on discriminatory grounds as an example of a wrongful dismissal.

Severance / Redundancy Pay: According to the Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment (Retrenchment Guidelines), it is standard practice for employers to pay a retrenchment benefit that varies between 2 weeks’ and one month’s salary per year of service.

Sick Leave: The number of days you are entitled to depends on your period of service, up to 14 days for paid outpatient sick leave and 60 days for paid hospitalisation leave. If you have worked for 6 months or more, you will get the full entitlement.

Thailand’s Employment Laws

As you’d expect, Thailand’s employment regulations are slightly different. In a number of aspects.

  • The minimum daily wage is 300 Baht per day
  • The maximum probationary period is 120 days
  • Maximum number of work hours per day varies between 8 hours and 9 hours, while maximum work hours per week varies between 48 hours and 42 hours per week
  • In addition to the 13 public holidays, each employee is entitled to a minimum of 6 days of annual leave
  • Employees are entitled to 30 days of sick leave

These regulations differ again when you look at countries such as China and Hong Kong, Indonesia, Malaysia or South Korea.

Knowing the ins and outs of employment rules and regulations in so many different countries can be complex and challenging, and risky.

This complexity is part of the reason why many businesses choose to outsource their payroll to a specialist service provider like CXC Global, which boasts in-country support and on-the-ground knowledge of employment laws and regulations in virtually all Asian countries.

You may also have to take into account things like changing legislation, worker classifications, compliance issues, health and safety training and obligations, contractor entitlements, and more. Then there’s the documentation and record-keeping mandates.

A smart employment solution for Asia

Today’s smart companies looking to expand internationally utilise the services of a specialist workforce management organisation like CXC for streamlined employment solutions such as:

An EoR (Employer of Record) This is essentially a company that takes on the legal responsibility of employing staff on behalf of your organization. It’s useful when you expand across borders, as it allows you and those staff to remain compliant with local laws and regulations without the hassle of creating and setting up a separate entity.

Officially the employee will be registered as an employee of the EOR, however he or she will carry out the duties as if he were registered under your enterprise.

The major benefit of using an EOR is that your company would not have to setup its own legal entity in the country it wishes to enter. The EOR will hire staff and those staff will act in the interests of your company.

A GEO (Global Employment Outsourcing) solution, popular in Asia, is a service firm offering quite similar to an Employer of Record but one that generally offers a more comprehensive range of HR services. These may include company setup, recruitment, onboarding, training, payroll and more.

A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in many Asian countries makes the use of a GEO advisable to ensure full compliance with local employment laws.

 

To learn more about how CXC Global can help you with payroll services and international expansion, don’t hesitate to contact us today!

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