Asia continues to open economic opportunities and remains relatively resilient despite the global pandemic. According to World Economics, Asia now contributes 45% to the global GDP and is forecasted to exceed 50% by 2030. Further, many companies across all industries around the world are currently competing for global talent.
Mainly in the southeast, Singapore placed second in the top 10 and is the only Asian country to attract and retain a skilled workforce in the Global Talent Competitiveness Index 2022. Meanwhile, the top 5 Southeast Asian countries that are attractive to global talent are Singapore, Malaysia, Thailand, Indonesia and Vietnam according to a worldwide study by Boston Consulting Group.
However, despite being a fast-growing region with innovative economies and a competitive global workforce, Asia has tremendous compliance challenges, especially with labour law. Navigating every labour law of more than a dozen countries is daunting and time-consuming for any organisation. That is why third-party experts, like CXC, are hired to help businesses manage this demanding yet significant requirement to run a business in Asia.
Managed Service Providers
In addition to the complex labour laws in Asia, multinational companies also have to navigate the political climate and varying stages of social and economic development in every country with a diverse range of cultures, languages and legal systems. With Asia’s increasingly significant role in the world economy, governments and business leaders must work together to raise the standards in labour regulation, hiring practices and social protection.
As mentioned earlier, the best solution now is to hire third-party experts, which are managed service providers (MSPs). It’ll be difficult for a single company to meet compliance in every country in the coming years without a reliable MSP.
MSPs are integrated into the HR department to handle talent sourcing, onboarding procedures and regulatory compliance in the entire operating territory of an organisation. CXC has a robust global contractor vetting and compliance platform to ensure the protection of both the organisation and employees against risks.
Labour Law Basics – What you need to know
Here are the basic labour laws in several Southeast and East Asian countries that organisations must adhere to when running a business in these territories.
| Countries | Minimum Wage Amount |
Legal Probation Period |
Standard Working Hours |
Legal Notice Period |
| Southeast Asia | ||||
| Singapore | NA but has minimum wage for cleaning, security and landscaping sector | No provision that specifies probation period, but standard practice is to have a 3-6 month period | Up to 9 hours per day or 44 hours a week | 1 day to 4 weeks, depending on the length of service |
| Malaysia | Minimum wage is 1500 ringgits per month for major towns under 56 city and municipality councils | No provision that specifies probation period, but standard practice is to have a 3-6 month period | 48 hours/ week; no more than 8hours/ day | Advance notice in writing is required as per agreed terms in employment contract. (Should correspond with the length of time the employee has worked for the company) |
| Thailand | Minimum wage varies through regions, ranging from 313 to 336 Baht (Under Review) | Depending on Labour contract, generally not exceeding 119 days |
8 hours/day |
Minimum statutory notice period is one pay period (usually one month), but no more than 3 months |
| Indonesia | Varies depending on the province. Lowest: Yogyakarta at $128 USD; Highest: Jakarta at $323 USD | No more than 3 months | 7 working hours in 1 day or 40 working hours for 6 working days in 1 week; or 8 working hours in 1 day or 40 working hours in 1 week for 5 working days in 1 week. |
30 days |
| Vietnam | Varies from region, VND 4.42 Million VND 3.07 Million ($134 -$193 USD) | Based on the nature and complexity of the job but probation is applied only once for each job and can be 6 to 60 days | 8 hours/day, mustn’t be more than 48hours/week; Overtime mustn’t be more than 60 hours a week | 45 days for indefinite term contracts; 3-30 days for definite term. Able to terminate immediately for mistreatment and pregnancy |
| Philippines | 537 PHP per day | No more than 6 months | 6 months 8 hours/day | 30 days |
| East Asia | ||||
| Mainland China | Highest: 2590 Yuan (Shanghai) | Up to 6 months, depending on labour contract period | No more than 40 hours/ week, normally 8hours per day | 30 days |
| Hong Kong | $37.5 HKD per hour | No provision that specifies probation period, but standard practice is to have a 1-3 month period | 8 hours per day only applicable to teenagers between 15 and 18 years old | Depending on probation period and contract provision. 7 days if contract does not include probationary period |
Source: 2022 Asia-Pacific Labour Law Comparison Chart
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