More International COVID-19 Labor Regulation Updates

The COVID-19 pandemic is still raging on. And even as we see a few signs of reopening, by and large, the global economy has changed, possibly forever. Many industries may be unable to function as normal until the wide distribution of a vaccine, and the massive job losses are indirectly impacting a lot of industries. For example, major tourist hotspots being shut down means that all the local businesses dependent on that influx are also dead in the water.

One other trend that is going on is countries radically changing their employment, tax, and payroll laws. In some cases, it’s done to protect employees, while in others, it’s to protect the economy. In some cases, it’s a bit of both. But what are some of these exact changes, and how do they impact companies with the plans to go global?

What Are The Latest Global COVID-19 Updates For Employment Law?

In our past coverage, we shared some of the updates that major international business hubs are making to their employment law in the wake of the COVID-19 pandemic. With this said, whether they are at the epicenter of the pandemic or more implicitly affected, every company needs to adapt. As a result, here’s a look at 10 different countries, and the changes to taxes, labor, migration, and payroll that they are making as a part of their COVID-19 response.

  • Australia: In early April, it was declared that for the following six months, qualifying employers could claim a Jobkeeper payment of $1,500 each fortnight for every eligible employee. Qualification was generally reserved for employers that anticipated a turnover reduction of 30% or more in a given year. The purpose of the program is to try and minimize laying off employees. Note that there is also an hourly rate guarantee, and even hours reduction can not impact that rate. Employees can also be directed to change duties, work at different locations, or take annual leave. More details …
  • France: Employees that are considered high risk and need to quarantine themselves can provide their employers with work cessation through their regional healthcare authority. For certain industries declared essential for economic and social life by decree, maximum working time can be extended to 12 hours a day and 60 hours a week. Companies also have the right to enact partial unemployment in the event that they need to suspend or reduce work activity. This works retroactively. More details …
  • Japan: Japan suggested that employers reduce the amount of employees coming in by 20-30%, but there will not be sanctions for companies that do not comply. Employees unable to come in due to being high risk can be directed to use sick leave. More details …
  • China: China phased in a reduction in pension, unemployment, and work injury insurance. Small, medium, and micro-sized businesses are not included in this order. If a company’s income has been impacted, they also have the ability to apply to defer social contribution payments. This generally applies to companies that have seen a 50% or more decrease in income since Q4 2019. More details …
  • Spain: Tourism-based companies that are able to operate from now until June will be able to apply for a 50% reduction in social security contributions. The right for unemployment benefits will also be extended to all workers even if they do not meet the minimum contribution period. More details …
  • Malaysia: Malaysia has extended its movement control order, shutting down all non-essential businesses to curb the spread of COVID-19. Any businesses that are allowed to operate need to keep their workforce to a minimum of 50% at least. Providing employees with letters to explain their movement to authorities is also recommended. As a major note, all employers are required to pay their employees in full during this time. If the employee does not have a fixed daily wage, it cannot fall below the Minimum Wages Order 2020. More details …
  • Poland: Retail sales tax will be suspended until the end of the year. There will also be subsidies for social security contributions and employee remuneration for qualifying companies. More details …
  • Algeria: Algeria’s government has reduced the reserve rate for banks, and delayed the deadline for filing tax returns. Employers should also proceed with social security contributions at all levels, without having to physically go to their reporting agencies. 50% of all employees in the private and public sectors should be put on paid leave for a given period. More details …
  • India: India put an order in place holding employee layoffs and salary cuts until measures were eased. Deadlines were also extended for the Unified Annual Return and Employees’ State Insurance Corporation. Certain employers will also get government contributions towards their Employees Provident Fund Organization through June. More details …
  • Philippines: The Philippines has begun to move forward with some reopening measures, but extreme sanitization and attendance limitation measures will be in place. Some employers adversely affected by the pandemic will also have the ability to apply for government aid through the CAMP program. This program will also connect out of work employees with job opportunities. More details …

Adapting Global Expansion Plans

As we can see, labor laws as we know them are rapidly changing to account for COVID 19. Granted, just because it’s more difficult to expand doesn’t mean it’s impossible. What you need to do is have a partner that will ensure that you keep the ball rolling without any concerns about compliance. The ideal option here is using a global PEO service like Acumen International. By being the formal (legal) employer of your international teams, you as a company reap a variety of benefits, including:

  • Support for payroll and benefits programs for your employees. This not only covers benefits changes during the pandemic, but will make sure you can draw in top talent when the workforce is open again.
  • Compliance protection. We guarantee compliance with all tax and employment regulations in over 190 countries for your selected workers. The COVID-19 regulation changes make it more difficult to manage on your own.
  • No need to incorporate. Bureaucracy made it hard enough to incorporate a new branch in different countries before. It’s close to impossible these days, so you want an option that lets you leapfrog it.
  • Hiring and paying your foreign sales teams. Immigration rules are likely to be in flux for a while, but we can help you with essential payroll support.

The Next Step

With all these changes in mind it’s important to realize that it’s still possible to enter a new market, even with the world in an upside down position. It’s just likely to be a bit more difficult. So, whether you’re looking to use an overseas sales team or plan to expand without incorporation, options are still on the table. What you need, though, is a global employer of record and global PEO solution to facilitate the transition. Make sure that you follow our blog for future COVID-19 updates.

Reach out to us today for more information.

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