Asian Labor Laws – Key Insights for China, Singapore and Philippines

Erez Greenberg September 06, 2017
Paddy Fields

Asia is an area of the world that is evolving rapidly, and many employers are turning their sights to the skilled labor populations throughout the region. This particular analysis will examine three Asian countries: China, Singapore, and the Philippines. As always, for quick insights into these or other countries, the CountryPedia has what you need.

China

China has the second largest economy in the world, but talent is difficult to come by in many areas. One HR Magazine article points out that talent is unevenly distributed throughout the country and some jobs are more challenging to fill with Chinese talent. At the same time, employers are still entering the area and driving growth.

Annual Leave: Employees do not receive many days off within a year, and the less working experience they have, the fewer days off they receive annual leave is calculated based on the years of their work experience. Some companies may offer more vocational days. But this should be formalized in a company’s policy and written in the handbook of the Human Resources department.

  • Less than 1 working year – 0 minimum leave days
  • 1–10 working years – minimum of 5 annual leave days
  • 10-20 working years – minimum of 10 annual leave days
  • More than 20 years – 15 annual leave days

There are also cases when employees are not entitled to annual leave. Annual leave may be denied for the following reasons:

  • Employee has taken 20 or more days of leave for personal reasons without salary deduction.
  • Employee has been on sick leave for 2 or more months. In this case, he or she should also have work experience of 10 years or less.
  • Employee has taken sick leave for 3 months or longer, provided he or she has work experience of 10 or 20 or more years.
  • Employee has taken 4 months or longer of paid annual leave. In this case, he or she has worked for the company for 20 years or more.
  • Employee is eligible for a seasonal holiday (Summer or Winter holiday) that has the same duration as annual leave.

It is worth pointing out that annual leave does not include rest days or public holidays.

If employees do not use their annual leave, they are compensated for it. Employers are required to pay their employees regular wages and 200% of their daily salary for each day of paid leave, which they did not take. Yet if a specific company offers more days of annual leave, beyond what is specified by the Chinese Labour Law, it is not required to compensate employees in this manner for the additional days they generously offer. In those cases when employers cannot give their employees their annual leave, they should compensate them with 200% of their regular compensation.

Working Hours: The standard workweek in China is 40 hours. Employees work 8 hours per day and 5 days per week. Yet under certain conditions, flexible work hours are allowed as well. Some companies still follow 6-day working week.

With regards to paying overtime in China, employees are grouped into three categories: 

1) The standard work hour system - from 9am to 6pm (incl. 1-hour lunch break), working 5 days a week;  

2) The comprehensive work hour system - a set period (typically one month) is used as the base to calculate the number of working hours; 

3) The non-fixed work hour system – no overtime for higher management and sales staff. 

Overtime during normal workdays, employees receive 150% of their wages. For overtime hours worked on rest days, employees receive 200% of their regular wages. People working overtime during statutory holidays receive 300% of their regular wages.  

Because China represents a complex market with a robust source of talent, Papaya Global has created 2 specific Country Guides dedicated to China available here: BeijingShanghai. These guides cover key details such as employment costs, work permits, and cultural challenges to help employers adequately prepare for hiring in this unique market.

Singapore

Singapore ranks the highest in Asia for attracting and developing high-quality talent, according to the Global Talent Competitiveness Index. The country’s government is working to establish itself as a hub of digital talent expertise for the rest of the world to tap into, according to Bloomberg.

Employers hoping to expand into Singapore should know that the compliance requirements are relatively straightforward, says Inside Counsel. Working relationships for most positions are governed by employment contracts which must be provided to workers no more than fourteen days after starting work. Additionally, about one-fourth of the workforce is unionized.

Annual Leave: Employees covered under the Employment Act are paid for eleven standard public holidays, and anyone that works during a scheduled holiday must receive 200% of their regular daily wage. With regard to paid leave, workers must receive seven days of paid leave after their first year of service. The number of days increases with each year of subsequent service and caps at fourteen days of maximum paid leave.

Work hours: If an employee works a 5-day work week, a workday is up to 9 hours a day or 44 hours a week. If an employee works a 6-day work week the workday is up to 8 hours.

Overtime is only paid to non-workman earning up to $2,600 or workman earning up to $4,500. Those who are eligible for overtime receive 1.5 times the hourly basic rate of pay. All payments must be made no later than 14 days after the last day of the salary period. The maximum number of daily hours is 12, and the employee cannot work more than 72 overtime hours a month.

For more information please see Singapore’s employment and labor law details in the CountryPedia.

Philippines

The Philippines is currently the world’s eleventh-fastest growing economy, producing more than its fair share of technology startups, a testament to the high-quality talent available in the relatively small country.

Annual Leave: Filipino workers are eligible for what is referred to as service incentive leave; however, this is typically offered in the form of vacation leave. Employees who have worked at least one year are entitled to this benefit of five paid days. If the leave is not exhausted by the end of the year, the balance of the leave should be paid out by the employer.

Work Hours: Employees may work a maximum of eight hours a day or 48 hours a week at their regular rate of pay. Employees must receive one rest day per week. Health personnel working in hospitals and clinics usually works 8 hours a day but only 5 days a week. Night shift workers receive 10% of their regular wage for each hour of work done between 10 pm and 6 am.

More than 8 hours a day is considered overtime and compensation will be regular wage plus at least 25%. If overtime is performed on a holiday or rest day, compensation should be holiday wage plus at least 30%.

13th Month Salary: A mandator benefit that employers are required to provide their employees is a Thirteenth Month salary. Non-managerial employees receive no less than 1/12 of the total basic salary earned by the employee within the calendar year. This payment is made to employees no later than December 24th each year.

For more information please see Philippine’s employment and labor law details in the CountryPedia.

Each of these countries has its own unique requirements, as well as a rich variety of talent that is ready and able to take on new employment opportunities. If your business is ready to start exploring these or other regions for growth, be sure to check out the Papaya Global technology platform and international payroll solutions – we make it possible to scale while minimizing growing pains.

To see how Asian countries compare to EMEA and Americas on criteria including employer taxes, average monthly salary and paid time off view our cost of hiring around the world infographic.

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