South Korea Raises Tax Rate for Funding Unemployment
The employment Insurance act has been revised and the unemployment insurance premium rate has been raised to improve the unemployment benefit system. The main purpose of the system is to help unemployed persons in South Korea find work while maintaining a minimum income.
The rate has increased from 1.3% to 1.6% and went into effect October 1st, 2019. Contributions towards the unemployment insurance are split evenly between the employer and employee, .8% each. The premium is made up of the unemployment benefit insurance rate and the employment stability contribution.
The revisions that have been made to the Employment Insurance Act are:
- Unemployment benefits have risen from 50% to 60% of the average wages.
- The period of unemployment benefits has been extended from the maximum 240 days to a maximum of 270 days.
The current raise in unemployment benefit is due to the reserves falling below the threshold over the past few years due to increased unemployment.
Brazil Approves Pension Reform
A social security reform has been approved by Brazil’s legislature and will change the monthly social security contribution rates for employees. The new rates and brackets will take effect starting in February 2020.
The new employee monthly contribution rates for the private sector are:
- 5% for those earning up to the minimum wage. (was previously 8%)
- 9% if earnings are between minimum wage and 2,000 Reals
- 12% for earnings more than 2,00 and up to 3,000 Reals
- 14% for earnings for earnings between 3,000 and 5,839.45 Reals
Public-sector employees currently are generally assessed a flat social tax rate of 11%.
The new monthly contribution rates in the public sector include the four new private sector rates, as well as the following four additional brackets:
- 5% for earnings of 5,839.46 reals and up to 10,000 Reals (
- 5% for earnings of more than 10,000 and up to 20,000 Reals
- 19% for earnings of more than 20,000 and up to 39,000 Reals
- 22% for earnings of more than 39,000 reals.
Changes to retirement are also part of the reform, with the retirement age of men set to 65, and 62 for women. Both men and women need a minimum 15 years of contributions toward the National Social Insurance Institute (INSS). Those who have not yet entered the labor force will need to contribute at least 20 years.
Indonesia Raises Minimum Wage
Due to inflation of 3.39% and an economic growth of 5.12%, the Ministry of Manpower in Indonesia has decided to raise the minimum wage. The hike which is set to take place January 1st, 2020, will be a mandatory increase of 8.51% for all provinces and districts. There are currently seven provinces that will require minimum wage adjustment; Central Kalimantan, Gorontalo, West Sulawesi, East Nusa Tenggara, West Papua, Maluku and North Maluku.
Venezuela Raises Minimum Wage
The minimum wage rate in Venezuela has risen for 10th Time in just 24 Months due to the rampant inflation occurring in the country. The minimum salary is now 300,000 Bolivars which is divided into 150,000 going towards the minimum wage and the other 150,000 towards the food bonus.
The current economic crisis in Venezuela and the hyperinflation occurring has led to severely damaging the private sector and causing a shortage of goods.
Chile’s Lower House Approves Bill to Reduce Workweek Hours
The Chamber of Deputies in Chile has approved a bill that would reduce the hours of a workweek from 45 to 40 hours. Although it has been approved by the Senate, the government can still take the case to constitutional court where the opposition to the bill holds majority.