Welcome to our July edition of the Global Employment Tax and Compliance Newsletter.
This month, we cover important employment, tax and immigration developments across key markets.
We also look at immigration continuity during M&A transactions, what the OECD Employment Outlook 2026 means for flexible work and post-employment restrictions, and how a global technology staffing firm navigated the tax, legal and relocation complexities of deploying a specialist to China.
European Union: New Guidance Clarifies Which Workplace AI Systems Are High-Risk
In July 2026, the European Commission published draft guidance on identifying high-risk AI systems, including systems used in employment and workforce management.
Workplace AI can fall into the high-risk category when it is used to:
- Recruit or select candidates, including filtering applications;
- Evaluate candidates during interviews or tests;
- Make decisions affecting promotion or termination;
- Allocate tasks using employees’ behaviour or personal characteristics;
- Monitor or evaluate employee performance.
The classification depends on what the system does and how its output influences a decision, not simply how the provider describes the product. Administrative tools that do not materially affect employment decisions may fall outside the high-risk category.
The detailed obligations for stand-alone high-risk systems, including employment AI, are now scheduled to apply from 2 December 2027. These cover risk management, data governance, documentation, human oversight and monitoring.
Separately, the Commission published transparency guidance on 20 July ahead of certain AI Act obligations taking effect on 2 August 2026. This includes requirements to inform people when they interact directly with specified AI systems.
Colombia: Sunday and Public Holiday Pay Rises to 90%
From 1 July 2026, employees working on their mandatory weekly rest day or a public holiday receive an additional 90% of their ordinary salary for the hours worked, up from 80%.
This is the second stage of the increase introduced by Colombia’s 2025 labour reform:
- From 1 July 2025: 80%
- From 1 July 2026: 90%
- From 1 July 2027: 100%
The surcharge normally applies to Sunday work. However, the employer and employee may agree in writing that another day will serve as the mandatory weekly rest day. Without a written agreement, Sunday remains the default.
Colombian law also distinguishes between occasional and habitual rest-day work. Working up to two mandatory rest days in a calendar month is considered occasional; three or more is considered habitual. This distinction affects the employee’s entitlement to compensatory rest.
The higher rate now needs to be reflected in payroll calculations, employment cost projections and shift budgets for employees working on Sundays, agreed rest days or public holidays.
Netherlands: Updated Income Requirements for Work-Related Residence Permits
The Dutch Immigration and Naturalisation Service has updated several income requirements for applications submitted between 1 July and 31 December 2026.
The monthly thresholds relevant to employment include:
- Paid employment, seasonal work and trainees: €2,337 gross SV salary, excluding holiday allowance
- Internships: €1,168.50 gross SV salary, excluding holiday allowance
- Researchers, guest lecturers and physicians training as specialists: €1,635.90 gross SV salary, excluding holiday allowance
The SV salary is the gross amount used to calculate Dutch wage tax and national insurance contributions. It appears separately on the employee’s payslip.
The salary thresholds for highly skilled migrants and European Blue Card holders did not change in July. They were set for the whole of 2026 and remain:
- Highly skilled migrant aged 30 or over: €5,942 per month
- Highly skilled migrant under 30: €4,357 per month
- Reduced highly skilled migrant criterion: €3,122 per month
- European Blue Card: €5,942 per month
- Reduced European Blue Card criterion: €4,754 per month
All figures exclude holiday allowance. Applications, employment contracts and payroll calculations must use the threshold applicable to the specific residence category rather than a general minimum salary figure.
Slovakia: New Immigration Rules for Foreign Employees
Slovakia introduced extensive changes to its immigration framework on 15 July 2026, affecting residence applications, employment-based permits and foreign employees who lose their jobs.
Foreign nationals holding an employment-based residence permit now have more time to find another position after their employment ends:
- Permit held for less than two years: three months
- Permit held for more than two years: six months
The previous grace period was 60 days. Foreign employees must still notify the authorities when unemployment begins and ends.
The amendment also tightens several application procedures. Applicants for work permits have 15 days to provide missing documents. If the documents are not supplied within that period, the application can be refused. Procedures covered by the Foreign Police reservation system now require an appointment.
Other changes include:
- Electronic confirmation of accommodation by property owners or accommodation providers;
- Digital residence documents through Slovakia’s eDoklady application, although physical cards remain necessary for border checks and certain official procedures;
- Closer examination of whether businesses supporting business-residence applications carry out genuine economic activity;
- Possible cancellation of business residence permits where the holder has outstanding tax, customs, social insurance or health insurance liabilities.
The reform also creates a transition for people covered by temporary protection connected with the war in Ukraine. When that protection ends, qualifying individuals will have one year to move to a standard residence category, including employment, business, study or family reunification.
South Africa: Medical Reports Removed from Certain Residence Applications
From 8 July 2026, South Africa no longer requires medical reports for:
- Temporary residence applications submitted within South Africa
- Permanent residence applications submitted either within South Africa or from abroad
The change applies to eligible temporary residence categories, including relevant work and business visa applications filed domestically. It removes the need to arrange and submit the medical examination previously required as part of the supporting documents.
The waiver does not extend to temporary residence applications submitted outside South Africa. Foreign employees applying abroad for an initial work visa may therefore remain subject to the existing medical-report requirement.
All other eligibility criteria and supporting documents remain unchanged.
South Korea: Foreign Employment Reporting Moves Fully Online
From 1 July 2026, foreign nationals covered by South Korea’s employment-information reporting rules must submit their reports through the HiKorea portal. The six-month transition period has ended, and paper submissions are no longer accepted.
The requirement applies to foreign nationals undertaking paid activity under 17 visa categories, including:
- E-1 to E-10: professional, technical and other employment visas
- D-7: intra-company transfers
- D-8: corporate investment
- D-9: international trade
- F-2, F-4, F-6 and H-2: specified residence and work categories
They must report their occupation, industry and annual income bracket when registering and submit another report within 15 days if their employment status, principal duties, industry or income bracket changes. A salary change only triggers a new report if it moves the employee into a different reporting bracket.
This filing is separate from any notification or permission required when changing employers. Completing the employer-change process does not automatically satisfy the employment-information reporting requirement.
UAE: Enforcement Begins for New Emirati Salary Minimum
From 1 July 2026, the UAE Ministry of Human Resources and Emiratisation can take action against private-sector employers that have not raised Emirati employees’ salaries to at least AED 6,000 per month.
The new minimum took effect on 1 January 2026 for new, renewed and amended citizen work permits. Employers with Emirati employees hired before that date had until 30 June 2026 to update their salaries and employment contracts.
Where an Emirati employee continues to earn below AED 6,000:
- The employee will not count towards the employer’s Emiratisation target.
- The employer may be prevented from obtaining new work permits until the salary is corrected.
The change is particularly relevant to employers relying on Emirati employees to meet mandatory Emiratisation ratios. Salary records held by MoHRE, employment contracts and payroll must now show the revised minimum for those employees to remain eligible for the calculation.
Compliance Updates at a Glance
Belgium: The government fee for Long-Stay Type D visa applications increased to €250 from 1 July 2026. The new fee applies to applications submitted on or after that date.
Saudi Arabia: UK nationals can now obtain a two-year electronic travel authorisation for tourism, business visits, short-term study and medical treatment. It allows multiple entries and stays totalling up to 180 days but does not permit employment.
China: Job-retention refunds, graduate and youth hiring subsidies, and skills-upgrading support have been extended through the end of 2026. Companies that avoid or limit redundancies may recover part of the unemployment-insurance contributions paid in the previous year.
Luxembourg: From 1 July 2026, employers without a formal right-to-disconnect arrangement can face administrative fines of €251 to €25,000. The arrangement must define when employees may disconnect, how technical tools are used and what awareness measures apply.
Singapore: The Local Qualifying Salary increased from S$1,600 to S$1,800 per month on 1 July. Companies hiring foreign workers must pay this amount to local employees not covered by a Progressive Wage Model. It also determines how many local employees count towards Work Permit and S Pass quotas.
Three Months of Full Global Payroll Calculator Access
Whether you are planning an international hire or costing one for a client, you need more than a gross salary figure.
The Global Payroll Calculator produces detailed employment cost estimates across more than 190 countries, showing total employer cost, employee deductions and estimated net pay. Country-specific taxes, statutory contributions, holiday accruals and 13th or 14th salary requirements are built into the calculation, while salaries and other inputs can be adjusted for different scenarios.
We are offering selected users three months of full access, free of charge.
Cross-Border M&A Immigration Due Diligence
A business acquisition can preserve an employee’s contract while quietly invalidating the immigration permission behind it. The employing entity may change, an intracompany relationship may disappear, or a new role, salary or location may fall outside the conditions originally approved.
The consequences often emerge only when the workforce is due to transfer: a critical employee cannot legally start with the buyer, a sponsor registration is missing, or a fresh work permit cannot be secured before closing.
Share purchases, mergers and carve-outs create different pressure points, and employees in the same country may face completely different outcomes.
Our latest article identifies the immigration questions that need answers before the transaction timetable is fixed, and the options for keeping affected teams employed when the buyer’s local infrastructure is not ready.
OECD Employment Outlook 2026
It is easy for a restrictive covenant to find its way into every employment contract in a global business. Whether it actually works is another matter.
Drawing on the OECD Employment Outlook 2026, this article looks at the striking differences between countries. Non-competes may be banned, limited to particular employees or enforceable only when compensation is paid. Their validity can also turn on how the employee leaves, what information they genuinely hold and whether collective bargaining rules apply. The same care is needed with NDAs, non-solicitation clauses, garden leave and repayment provisions.
The OECD also reports tighter controls on fixed-term, agency and other non-standard working arrangements. This leaves international employers squeezed at both ends: less freedom to use flexible models when hiring and less freedom to restrict employees after they leave. The article considers what that shift means for the way cross-border employment arrangements are designed from the outset.
Global EOR for VC & PE Funds
Portfolio companies often establish local entities before they know whether a new market will deliver. If it does not, the fund is left carrying the cost of payroll infrastructure, tax filings, advisers and an eventual corporate wind-down. Repeated across a portfolio, those early commitments consume capital and management attention without creating value.
This article looks at Global EOR as shared infrastructure for VC and PE portfolios. Venture-backed companies can test demand, secure specialist talent and build international traction before investing in an entity. PE firms can use the same infrastructure to move employees during carve-outs, integrate cross-border teams after acquisitions and rationalise inherited operations.
China EOR for Specialist Talent: Solving Tax, Visa and Compliance Complexity
A global technology staffing firm needed to relocate a key specialist and their spouse to China for a critical client assignment. Before the placement could proceed, the agency needed firm answers on employment costs, tax, immigration, healthcare, termination risk and the effect on its margin.
Before committing, the consultant needed a clear view of take-home pay under China’s progressive tax system, private healthcare and the immigration route for his spouse. At the same time, the staffing firm needed to understand social contributions, severance exposure, currency risk and the effect of every cost on its placement margin.
Acumen built progressive tax and net-pay models, accounted for social contributions and currency risk, drafted the employment contract and offboarding liabilities, and coordinated the specialist’s Z-visa and family relocation.
The resulting arrangement gave the consultant a realistic picture of life and earnings in China, satisfied the agency’s legal review and created a compliant route for the family’s relocation. It also allowed the end-client to secure the specialist without establishing its own local entity.
That’s all for July 2026. We’ll be back next month with the employment, tax and compliance developments affecting international workforces.
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