In an increasingly globalized world, people may drink the same coffee, use the same technology and wear the same clothes but when it comes to employment standards, local is still unique.
A brief look at a variety of core employment standards — around wages and overtime, hours of work, vacation and leaves — across several overseas markets reveals the differences.
Employment agreements neatly balance the needs of industry with the needs of the more vulnerable segments of the workforce. The Employment Act (EA) covers all employees with the exception of managers and executives (including skilled professionals), domestic workers, seafarers and government staff.
Employees included in the EA are divided into two groups, distinguished by salaries: above $2,000 SGD ($1,629) per month (we’ll call them group A) and below $2,000 SGD per month (group B). Group B receives additional coverage, particularly around hours of rest, work, overtime and various benefits. Terms of employment are negotiated between the employer and employee, provided they respect certain standards, including the EA.
A minimum wage or salary scale does not exist. Only group B is automatically eligible for overtime pay, to a maximum of 72 hours per month, at a payment of 1.5 times the regular hourly wage. Overtime for all others depends on their negotiated employment contracts.
Annual vacation entitlement for managers and executives and group A starts at 15 days. Entitlement for group B employees starts at seven days. However, common practice greatly exceeds the statutory minimum as typically all employees receive at least 12 days annually. Singapore observes 11 days of statutory holidays and while only group B is entitled to them, it is common practice for all employee groups to participate.
Sick leave is only guaranteed for group B. The amount varies based on service and covers illness and hospitalization leave. Most companies grant at least the legal minimum sick leave for all employees.
Leaves for maternity (female employees only) and child care (male and female employees) exist for employees in all categories. Eligibility depends on the employment service, nature of work, citizenship and age of the child, and the marital status of the parents. Paternity, compassionate and marriage leaves do not exist in the statutes.
The EA is currently under a major review in order to ensure its continued competitiveness and appropriateness.
Employment standards are governed by labour contract law. The statutes are comprehensive and quite prescribed, although rates of payment or coverage vary greatly by region.
Five main social insurance programs or mandatory benefits exist: pension, medical insurance, unemployment insurance, work-related injury and maternity leave. Both the employer and employee must make contributions. The rates paid by employers are significantly higher. Rates vary regionally and are calculated according to either the average company salary or the individual employee’s salary and nature of work (such as work-related injury insurance).
While actual salary costs can be low, social insurance costs are mandatory and, in theory, quite high: 18 per cent to 39 per cent of salaries. In practice, the actual amounts paid may be lower because a maximum cap exists, which varies regionally and changes frequently.
Minimum wages (hourly or monthly) are established by provincial and municipal government and are reviewed frequently. Overtime is not mandatory and the rate of payment varies by region.
Annual vacation entitlement starts at five days. All employees are eligible for 11 national holidays. Most businesses also close for seven days during the major holidays of Spring Festival and National Day.
As China continues to grow and change at a rapid rate, western HR issues are quickly emerging, including increased competition for recruitment, retention and work stoppages.
The Employment Rights Act 2008 offers basic employment standards, however, the requirements are very specific. The act only covers employees earning less than 360,000 rupees ($11,600) per year. A threshold of 12 months of continued service is critical to entitlements.
Very detailed and prescribed minimum wage scales are set for private sector jobs, taking into account years of experience in a position. While agreements can be made for terms that exceed the act, pay equity is also required in that employees performing the same work must receive the same wages.
Typical hours of work are eight hours per day, not to exceed 90 hours over two weeks (certain exceptions apply). Workers must have a minimum of 11 consecutive hours off per day. Overtime is 1.5 times the regular rate, double pay if on Sundays or holidays. Employees are entitled to 24 hours’ advance notice.
After 12 months of continuous service, employees receive 20 days of paid vacation, plus two additional days’ leave and 15 annual public holidays. Unused vacation is paid out.
A paid maternity leave of 12 weeks is available for employees with 12 months’ continuous service. A five-day paternity leave is available to fathers with 12 weeks’ service. They must provide a medical note and state in writing they are living with the mother of the newborn in either a religious or civil marriage. Common-law spouses are ineligible.
Employees are entitled to 15 days of sick leave after 12 months of service; unused sick leave can be rolled over to a maximum of 90 days banked.
The act also contains some rather unique entitlements, including meal allowances for long hours, break times for nursing mothers, special provisions for people affected by cyclones and an employer’s transportation obligations if the place of work is farther than three kilometres from an employee’s home or falls outside of bus schedules.
Establishing and managing the relationships between employers and employees should be quite formal, in that standards and processes exist for all key employment standards.
There is a minimum wage scale that varies by job type and employee. Overtime is not mandatory, however, typically, workweeks cannot exceed 48 hours, averaged over 17 weeks. Additionally, special rules apply for working during the nighttime period (deemed to be 11 p.m. to 6 a.m.), as well as working on Sundays; both situations require an agreement in writing. Specific rules covering the duration of breaks and rest periods also exist. Entitlements vary by age and the nature of the work.
Annual vacation is a minimum of 5.6 weeks plus about eight or nine statutory holidays per year. Employees are entitled to a variety of leaves (such as maternity, paternity, parental, adoption, caring for dependants, civic responsibilities and career leaves). Each type of leave is administered by specific terms.
Of particular note, the occupational health and safety standards are extremely stringent and apply across all types and places of work, in all industries.
The statutes in the labour code are at once very broad and very detailed. Special sections covering various industries and types of jobs exist. A significant portion is devoted to trade unions.
A minimum wage scale is set and adjusted annually by the government. A standard workday is eight hours, up to a maximum of 45 hours per week. Employees are permitted to work a maximum of 10 hours per day, of which two hours are overtime. Employees are entitled to one full 24-hour rest period each week. However, other standards exist for various job types or industries.
All employees are eligible for the public holidays each year (minimum of 11). Basic vacation entitlement is 15 days per year. After 10 years of service, an extra day is earned for every third year of service.
All women are entitled to maternity leave, regardless of industry or job type, which consists of six weeks before delivery and 12 weeks after. A paternity leave of five days is available to fathers.
The laws pertaining to health and safety regulations, including a fire safety code and hours of work, are among the most strictly enforced labour laws in Chile. Employers that fail to comply risk stiff penalties.
Many factors must be considered when evaluating international opportunities, and local employment standards are not to be underestimated. In addition to legal compliance, a solid understanding of a market’s employment standards and practices will yield a better appreciation of the cultural and legal expectations of that market’s workforce.
Lynne Fornarolo is a consultant at Ward O’Farrell Consultants in Montreal. The firm, which specializes in the benchmarking, design and implementation of employee mobility programs, also has an office in Toronto and can be reached at (514) 697-3857, (905) 474-4080 or www.wardofarrell.com.