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2023 Country Regulation Updates (April - July) Internal

Gretchen Brooker
  • Updated

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In the tabs below you will find updates to country regulations in April, May, June, and July 2023, many of which may impact employee benefits and/or costs of employment.

As always, if you have any questions or concerns, please reach out to Velocity Global through your normal process, and we will help you.

Australia

Employer Contribution Increase

Effective July 1, 2023, the Payroll Tax employer contribution in Victoria has increased from 5.35% to 5.85%. This will lead to an increase in employer contributions.

 

Effective July 1, 2023, Velocity Global's workers' compensation rates are as follows:

State Old Rate New Rate
Victoria 0.206% 0.360%
New South Wales 0.198% 0.203%
South Australia 0.206% 0.391%
Western Australia 0.600% 0.460%
Northern Territory No change No change
Australian Capital Territory 0.370% 0.560%
Queensland 0.206% 0.437%
Tasmania 0.206% 0.740%

 

Effective July 1, 2023, the superannuation contribution increased from 10.5% to 11.00%. This is applicable in all states and will lead to an increase in employer contributions.

Chile

Minimum Wage Increase Leading to Employer Contribution Increase

Effective May 1, 2023, the minimum monthly income for workers between ages 18 and 65 was raised to CLP 440,000 (previously it was CLP 410,000). This will lead to a slight increase in employer contributions.

This amount will increase to CLP 460,000 effective September 1, 2023.

Statutory Working Hours Change

On April 26, 2023 a new law was published that will reduce the weekly working hours over the next five years.

The working hours will be gradually decreased as follows:
April 26, 2024: the working hours will be reduced from 45 to 44 weekly hours.
April 26, 2026: the working hours will be reduced to 42 hours per week.
April 26, 2028: the working hours will be reduced to 40 hours per week.

Employers have the possibility to implement the reduction of hours sooner than what the law states.

This change does not permit salaries to be reduced based on the number of hours nor does it require the creation of addendums to current employment agreements as it is understood it is now part of the employment agreement.

China

There have been several recent (effect 1 July 2023) changes to the employer social contributions in China.

Shanghai

  • The Medical Insurance employer contribution has decreased from 10.5% to 10%.
  • The maximum salary base used for the calculation of the Pension, Medical, Unemployment, Work Injury, and Housing Fund contributions has increased to CNY 36,549.
  • The maximum salary base used for the calculation of the Disabled Fund contribution has been changed to have no limit.

Shenzhen

  • The Medical Insurance employer contribution has increased from 5.20% to 6.20%.
  • The Work Injury Insurance employer contribution has increased from 0.11% to 0.28%.
  • The Childbirth employer contribution has increased from 0.45% to 0.50%.
  • The following changes have been made to the maximum salary base used for the calculation of various social contributions:
    • Pension Insurance: CNY 22,941 to CNY 26,421
    • Medical Insurance CNY 34,869 to CNY 38,892
    • Unemployment Insurance: CNY 999,999 to CNY 2,360
    • Work Injury Insurance: CNY 999,999 to no limit
    • Childbirth Insurance: CNY 34,850 to CNY 38,892
    • Housing Fund Insurance: CNY 34,860 to CNY 41,190
    • Disabled Fund Insurance: CNY 999,999 to no limit

Chengdu

  • The Occupational Injury Insurance employer contribution has been decreased from 0.20% to 0.16%.
  • The following changes have been made to the maximum salary base used for the calculation of various social contributions:
    • Medical Insurance: CNY 20,355 to CNY 21,228
    • Maternity Insurance: CNY 20,355 to CNY 21,228

Fuzhou

  • The Occupational Injury Insurance employer contribution has been decreased from 0.35% to 0.70%.
  • The following changes have been made to the maximum salary base used for the calculation of various social contributions:
    • Medical Insurance: CNY 19,962 to CNY 21,060
    • Maternity Insurance: CNY 19,962 to CNY 21,060

Xiamen

  • The Medical Insurance employer contribution has been increased from 0.30% to 0.50%.
  • The Unemployment Insurance employer contribution has been decreased from 7% to 6.50%.
  • The following changes have been made to the maximum salary base used for the calculation of various social contributions:
    • Medical Insurance: CNY 19,962 to CNY 21,060
    • Unemployment Insurance: CNY 999,999 to CNY 19,962
    • Occupational Injury Insurace: CNY 999,999 to CNY 26,169
    • Maternity Insurance: CNY 19,962 to CNY 21,060
    • Housing Fund Insurance: CNY 28,884 to CNY 22,000

Chongqing

  • The maximum salary base used for the calculation of the Housing Fund contribution has decreased from CNY 26,742 to CNY 21,352.

Dongguan

  • The Medical Insurance employer contribution has been increased from 2.30% to 6.20%.
  • The Unemployment Insurance employer contribution has been increased from 0.32% to 0.70%.
  • The Work Injury Insurance employer contribution has been increased from 0.26% to 0.28%.
  • The Childbirth Insurance employer contribution has been decreased from 0.70% to 0.50%.
  • The following changes have been made to the maximum salary base used for the calculation of various social contributions:
    • Pension Insurance: CNY 24,930 to CNY 26,421
    • Medical Insurance: CNY 19,191 to CNY 20,868
    • Unemployment Insurance: CNY 22,242 to CNY 23,442
    • Childbirth Insurance: CNY 19,191 to CNY 20,868

Guangzhou

  • The following changes have been made to the maximum salary base used for the calculation of various social contributions:
    • Pension Insurance: CNY 24,930 to CNY 26,421
    • Medical Insurance: CNY 36,072 to CNY 28,368
    • Unemployment Insurance: CNY 36,072 to CNY 38,082
    • Occupational Injury Insurance: CNY 999,999 to no limit

Colombia

Effective 16 July 2023, working hours have been reduced to 47 hours per week. Working hours will continue to be reduced each year on 16 July. In 2024 they will be reduced to 46 hours per week; in 2025 they will be reduced to 44 hours per week; and in 2026 they will be reduced to 42 hours per week.

Cote D’Ivoire (Ivory Coast)

Mandatory Compensation Increase

Due to recent inflation, the government has instructed employers to make an 11% increase in base salaries. This change will be retroactive to January 2023 and will be applied in July payroll.

Estonia

Effective 1 July 2023, sick leave is paid as follows:

  • The first three days are not paid
  • The fourth through eighth days are paid by the employer
  • From the ninth day of illness, the Health Fund pays compensation.

Italy

Updates and Changes to Employees Classified as ‘Dirigenti’

Bonus (Una Tantum)

Employees classified as ‘Dirigenti’ as of April 12, 2023 are owed a bonus (Una Tantum) of EUR 2,000, which is split between the May, September, and November payslips. These amounts are pro-rated based on when the employee was hired within the January 1, 2020 - December 31, 2022 timeframe. For example, if the employee was hired in July 2021, they would receive only half of the amount below.

  • EUR 700 in May 2023 payslip
  • EUR 700 in September 2023 payslip
  • EUR 600 in November 2023 payslip

Employer Contribution Increase
The employer contribution to the Mario Negri Fund will increase from 2.39% to 2.43% in January 2024. It will increase again to 2.47% in January 2025. This will lead to slight increases in employer contributions.

Japan

Employer Contribution Increase

Effective 1 April 2023, the employer's portion of the Employment Insurance is 0.95%. It was previously 0.85%, so this represents an increase in employer contributions.

Kenya

Employer Contribution Increase

Effective July 1st, 2023, a new employer contribution was established. It is the National Housing Development Fund, and employers must contribute 1.5% of the employee’s monthly gross salary. This will lead to an increase in employer contributions.

Personal Income Tax Bracket Change

Effective July 1, 2023, new personal income tax brackets and rates have been introduced, which are as follows:

  • 32.5% for annual income between KES 6,000,000 and KES 9,600,000
  • 35% for annual income above KES 9,600,000

Lebanon

Cost-of-Living Payment

Effective 26 April 2023 a mandatory cost-of-living adjustment of LBP 6,400,000 per month has been implemented. This must be provided to all employees.

Luxembourg

Mandatory Salary Indexation

There was a mandatory 2.499% increase in employee salaries in Luxembourg in both February and April.

Peru

New Statutory Holiday Established

A new public holiday has been established in Peru for July 23 in commemoration of Captain FAP José Abelardo Quiñones Gonzales. This will be celebrated every year going forward.

Poland

New Mandatory Work-from-Home Allowance

Effective April 7, 2023, employers are required to provide a work-from-home allowance for all new employees in the amount of PLN 146 per month. This allowance must be provided to all existing employees by October.

Portugal

Employer Contribution Change

Effect May 1, 2023, the Wage Guarantee Fund employer contribution (1% of monthly gross salary) has been eliminated. This results in a decrease in employer contributions.

Statutory Requirement Changes

Mandatory Training
Effective May 1, 2023, the required 40 hours of paid training that employers must provide to employees cannot expire or be waived. This means that if they are unused, they must be paid out at the conclusion of an employment relationship, which could represent a significant cost.

Overtime
Effective May 1, 2023, there are changes to the compensation rates for overtime work exceeding 100 hours. Overtime work that exceeds 100 hours per year will now be compensated at a higher rate compared to overtime work that is less than 100 hours per year. The new overtime rates are as follows:

Overtime of less than 100 hours per year:

  • On a normal workday:
    • 125% of the normal salary during the first hour of overtime; then
    • 137.5% of the normal salary for hours after that; and
  • On a day off (regardless of whether the day off was mandatory or supplementary) or public holiday: 
    • 150% of the normal salary.

Overtime work exceeding 100 hours per year:

  • On a normal workday:
    • 150% of the normal salary during the first hour of overtime; then
    • 175% of the normal salary for hours after that; and
  • Overtime on a day off (regardless of whether the day off was mandatory or supplementary) or public holiday:
    • 200% of the normal salary.

If the employee's overtime hours prevent them from having a minimum rest period of 11 consecutive hours between working days, in addition to receiving monetary compensation, they are entitled to compensation equivalent to the hours of rest they were unable to take. As a result, the employer is required to grant the employee a paid rest day within the three working days following the overtime hours.

South Korea

Employer Contribution Increase

Effective July 1, 2023, the monthly maximum contribution for the national pension employer contribution increases from KRW 248,850 to KRW 265,500. This will lead to a slight increase in employer contributions.

Spain

Fixed Rate Change

Effective 17 July 2023, Spain's tax-free travel expense reimbursement has increased to EUR 0.26 per km. It was previously EUR 0.19 per km.

Turkey

Employer Contribution Increase

The minimum wage in Turkey increased on July 1, 2023, which impacts the maximum contributions for social security employer contributions. The maximum salary base used for the calculation of social security contributions has increased from TRY 75,060 to TRY 100,608.90. Depending on an employee’s salary, this may increase employer contributions.

Uzbekistan

Statutory Entitlement Change

Due to recent changes in the Labor Code of Uzbekistan, effective from May 1, 2023, vacation days are now required to be calculated in calendar days instead of work days.

For example, an employee who was entitled to 25 working days of vacation is now entitled to 29 calendar days. An employee who was entitled to 15 work days of vacation is now entitled to 21 calendar days.

Vietnam

Employer Contribution Increase

Effective July 1, 2023, the monthly maximum salary used for the Social Insurance, Health Insurance, and Trade Union employer contributions increase from VND 29,800,000 to VND 36,000,000. Depending on an employee’s salary, this may lead to increased employer contributions.

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