China: Details of Major Labor Law Violators to be Made Public
On September 1, 2016, the PRC Ministry of Human Resources and Social Security ("MOHRSS") issued the Public Announcement of Major Labor and Social Security Violation Acts Measures ("Measures"), which will take effect on January 1, 2017. Under the Measures, major labor and social security law violations will be announced through labor authorities' official websites and major local media, as well as recorded in the employer's labor and social security credit file. In addition, they will be included in a human resources social security credit system, as part of the national society credit system, to be shared with other government agencies and organizations. Municipal and county-level labor authorities are required to announce major violation cases once a quarter, and MOHRSS and provincial level labor authorities are required to make announcements twice a year.
Major labor and social security violations include: (i) delaying or deducting salary payments or refusing to make salary payments; (ii) refusing to enroll in the social insurance system or refusing to make social insurance contributions; (iii) serious violations of rules on working time, rest time, holidays, protection of female employees and minor employees (under the age of 18 but reaching the age of 16), or prohibition of hiring child laborers (under the age of 16); and (iv) violations causing severe adverse impact to society.
What is regarded as "serious" or "severe" will be determined by local labor authorities according to their applicable standards.
The Shanghai Municipal Human Resources and Social Security Bureau issued new Shanghai Enterprise Salary Payment Measures ("New Salary Measures"), effective from August 1, 2016 to July 31, 2021. The New Salary Measures include a number of changes to the prior measures issued in 2003 to ensure consistency with the Labor Contract Law 2008 and its amendments. The New Salary Measures also provide guidance on some issues that are not covered or clearly stated in the Labor Contract Law, including: (i) the calculation base for overtime payment and leave payments; (ii) the timing of payment of final payroll upon termination; and (iii) the circumstances and extent to which an employer may decrease or deduct wages in the event of violations of rules and policies.
In order to ease the burden on companies and boost the economy, the central government has decided to decrease the contribution ratio of pension insurance, unemployment insurance, and housing fund for two years from May 1, 2016. Social security contribution ratios continue to vary by location, so employers should review their local requirements to see how this policy will be applicable to their businesses. Many local authorities have issued updates to their rules following the announcement of the national policy.
In April 2016, the Hong Kong Privacy Commissioner for Personal Data issued a Revised Code of Practice on Human Resource Management ("HRM Code") and new Guidelines on Monitoring and Personal Data Privacy at Work ("Monitoring Guidelines") under the Personal Data (Privacy) Ordinance ("Ordinance"). The HRM Code was issued together with a related Compliance Guide and Responses to Common Questions. The HRM Code is intended to provide practical guidance to employers on how to properly handle personal data for each phase of the employment process, from recruitment through to former employee.
Failure to abide by the mandatory provisions of the HRM Code will be considered, and could be viewed unfavorably, by the Privacy Commissioner in any case against the employer. The Monitoring Guidelines provide guidance to employers on the application of the provisions of the Ordinance to monitoring and collection of employee data and how and when such activity is appropriate. While not mandatory, the Monitoring Guidelines do provide suggested best practices for employers.
Amendments to the "Ordinance for Enforcement of the Act on the Succession to Labor Contracts upon a Company Split" ("Succession Act Ordinance") and the "Guideline for Appropriate Implementation of Measures to be Taken by a Split Company or Succeeding Company Related to the Succession to Labor Contracts or Collective Agreements Executed by a Split Company" ("Succession Act Guideline") came into effect as of September 1, 2016.
Under the Japanese laws, labor contracts are automatically transferred upon a company split (Kaisha-Bunkatsu) without requiring the individual consent of the employees, pursuant to a company split agreement. However, employees who do not engage in the primary activities of the successor business ("Non-Essential Employees") may choose not to have their labor contracts transferred pursuant to the company split.
The Act on the Succession to Labor Contracts upon a Company Split ("Succession Act"), Succession Act Ordinance, and Succession Act Guideline all contain procedures designed to increase employee awareness of the effect of employment transfers. They encourage communication between employers and employees by imposing obligations on companies to consult with their employees and ensure they are well informed before embarking on the company split process. Specifically, companies must: (i) consult with the union or other representative that represents the majority of employees and inform them about the reasons for the company split (and any other relevant matters); (ii) conduct individual consultations with relevant employees regarding the succeeding company and the impact of the company split; and (iii) issue notices to the employees who will be transferred, outlining any changes to their employment conditions as a result of the company split.
Under the previous Succession Act Guideline, companies were not required to conduct individual consultations with Non-Essential Employees under the step in (ii) above but were required to issue a notice under the step in (iii). The amended Succession Act Guideline includes Non-Essential Employees among the employees with whom companies are required to individually consult, and as a result, Non-Essential Employees will be given greater notice of the intended transfer and more time to determine whether or not to consent to it.
In addition, the "Guideline for Matters to be Noted by Company Carrying Out Business Transfers or Mergers" ("Business Transfer Guideline") also came into effect as of September 1, 2016. Under Japanese law, an employee's individual consent is required to transfer a labor contract upon a business transfer (Jigyo-Joto). However, since there were previously no rules governing how employee consent should be obtained, employees often consented without being fully informed about the business transfer. The Business Transfer Guideline now provides a number of requirements with which companies must comply in obtaining employee consent to a transfer of their contract. These procedures are similar to those stated above in respect of company splits and are similarly designed to increase employee awareness regarding business transfers. For example, the Business Transfer Guideline requires that the assignor company fully explain the business transfer to employees whose employment will be transferred and to consult with them so as to gain their informed consent.
These ordinances and guidelines have not made any fundamental changes to the laws governing succession to labor contracts upon a company split, but they do impose stricter procedural requirements on companies. Companies should be careful to ensure they comply with these ordinances and guidelines in order to avoid any doubt as to the validity of employment transfers.
On May 6, 2016, Australia and Singapore announced a new package of initiatives to advance Australia's economic and defensive partnership with Singapore.
The wide-ranging initiatives include greater certainty for Australians entering and working temporarily in Singapore, with reduced barriers to labor mobility. Singapore will provide new guaranteed access for Australians to stay and work in Singapore in the following categories: (i) Australian independent executives and contractual service suppliers, up from three months to two years; (ii) Australian intra-corporate transferees, up from two years to three years (with a new maximum stay of 15 years); (iii) Australians offering services relating to installation and servicing of machinery and equipment for up to three months; and (iv) spouses and dependants of Australians granted entry as intra-corporate transferees, independent executives, and contractual service suppliers.
Singapore will also establish a help desk and streamlined processes for Australian businesspeople seeking to enter and work in Singapore.
Foreign professionals, managers, and executives require an employment pass or permanent resident status to work in Singapore. From January 1, 2017, the qualifying salary for Singapore Employment Pass ("EP") applications will increase from $3,300 to $3,600 per month. This change is part of the Ministry of Manpower's regular updating of the EP qualifying salary to keep pace with rising local wages and maintain the quality of Singapore's foreign workforce.
To provide lead time for businesses to make adjustments, existing EP holders whose passes expire: (i) before January 1, 2017, will be able to renew, for a duration of up to three years, based on existing EP criteria; (ii) between January 1, 2017 and June 30, 2017 (dates inclusive), will be able to renew, for a duration of one year, based on the existing EP criteria; and (iii) from July 1, 2017 onwards, will have to meet the new criteria for renewal, for a duration of up to three years.
From April 1, 2016, all employers must issue itemized pay slips to employees covered under the Employment Act.
Itemized pay slips can be in soft or hard copy and are to be given within three days of payment. Pay slips must include the following: full name of employer; full name of employee; date of payment (or dates, if the pay slips consolidates multiple payments); basic salary; start and end date of salary period; allowances paid for salary period; any other additional payment for each salary period, such as bonuses, rest day pay, or public holiday pay; deductions made for each salary period (including employee's CPF contribution); overtime hours worked; and net salary paid in total.
Employers must keep a record of all pay slips issued in soft or hard copy for the last two years. From April 1, 2016, all employers must maintain detailed employment and salary records of employees covered under the Employment Act in soft or hard copy for two years.
Employee records must record the following: address; NRIC number; for non-citizens, work pass number and expiry date; date of birth; gender; date of starting employment; date of leaving employment; working hours, including duration of meals and tea breaks; and dates and other details of public holidays and leave taken.
The salary records must contain the same items required for itemized pay slips (listed above).
In Taiwan, the labor pension reserve fund is the fund from which employees eligible for the pension scheme under the Labor Standards Act ("LSA") (generally referred to as the "Old Pension Scheme") receive their pension payments upon retirement. Pursuant to the old LSA, employers were required to contribute between 2 percent and 15 percent of their total monthly payroll to the labor pension reserves fund. Employers were required to take into consideration the length of service of their employees, their employee wage structures, employee turnover rates, and other factors when determining their contribution rate. However, more than 80 percent of employers have been contributing to the labor pension reserves fund at just the 2 percent minimum contribution rate.
In recent years, the insufficient funding of the labor pension reserve fund has led to an uptick in disputes between employees and employers over outstanding pension and severance payments after the employer had ceased operations or been declared bankrupt. In light of this, the LSA was amended on February 4, 2015, to require employers to annually review whether their funding of the labor pension reserve fund is sufficient to cover the total amount of pension payments to employees who are eligible for retirement within a year. If necessary, employers must make up for any shortfalls by March 31 of the following year. In conjunction with the amendment of the LSA, the Ministry of Labor has also introduced rules on how to calculate the adequate level of funding of the labor pension reserve fund, so that employers are prepared for the implementation of the LSA amendments.
As a consequence of the amendments, employers can no longer contribute to the fund at just the 2 percent minimum contribution rate. Any employer who fails to fulfill the funding requirements will be liable for fines ranging from NT$90,000 to NT$450,000. Local governments have begun issuing such fines as of July 2016. Since the implementation of the amended LSA, labor pension reserves fund contributions by employers have skyrocketed. According to statistics released by the Ministry of Labor in July 2016, historic yearly contributions to the labor pension reserve fund by employers averaged approximately NT$60 billion per year. By way of comparison, in 2015, employer contributions to the labor pension reserve fund totaled NT$83.6 billion, whereas in the first six months of 2016, employer contributions had already reached NT$167.4 billion. Additionally, the number of employers who have met the funding requirements has grown to 98,000, representing more than 80 percent of all employers.