Global Employment Tax and Compliance Newsletter. 7th Edition. July 2023

Press Release from Acumen International: Global EOR/PEO

Greetings and welcome to the July 2023 issue of our Global Employment Tax and Compliance Newsletter. As our world rapidly evolves, the arena of international employment, tax, and immigration law keeps pace, consistently offering new challenges and opportunities.

In this edition, we dive into many legislative changes spanning multiple corners of the globe. From the sweeping labour and tax law transformations in the United Kingdom and Ireland to the dynamic alterations to remote work regulations in the United States – particularly New York – this issue leaves no stone unturned. Our journey also takes us to the heart of Europe with a detailed overview of Belgium's employment laws and crosses oceans to bring you the latest updates from Australia and Malaysia.

Our mission with this Newsletter is more than to inform; we aim to enlighten you, providing you with the insights you need to better comprehend the intricacies of these developments. Whether you are an employer seeking to meet changing obligations across jurisdictions or a global employment professional keeping up with the ever-evolving legal landscape, our expertly curated content is designed to enhance your understanding and preparedness.

As you delve into this month's edition, we trust you will find the analysis insightful, the updates valuable, and the perspectives thought-provoking. We welcome you to join us in exploring the shifting global regulatory panorama.

Stay tuned, stay informed, and stay ahead of the curve!

🇬🇧 A Sharp Increase in UK Business Immigration Visa Fees Announced

To finance proposed wage enhancements in the public sector, the UK government has declared its intentions to raise various immigration-associated charges significantly.

Changes to Immigration Health Surcharge

An essential modification will be in the Immigration Health Surcharge, an upfront payment due during the visa application for each year of the visa's validity. The standard rate will experience a jump from £624 to £1,035 per year, and for those under 18 and students, an increase from £470 to £776 per year is planned. To illustrate, a 3-year visa would now necessitate a Health Surcharge of £3,105.

Work and Visit Visa Application Fee Increase

The costs associated with work and visit visa applications are set to climb by 15%. This means that the expense for a 3-year Skilled Worker visa application lodged outside the UK would rise from £625 to £719.

Boost in Other Visa-related Fees

Further increases of at least 20% are expected for fees related to Certificates of Sponsorship, citizenship, settlement, wider entry clearance, study visas, leave to remain, and priority visas. Although no exact date for these increases' enforcement has been communicated, they're likely to be implemented in the near future due to the current economic climate.

Implications for Employers

These significant augmentations could drastically affect UK employers who plan to sponsor non-UK/Irish nationals for work in the country, especially when considered alongside the existing Immigration Skills Charge for sponsored work visas, which stands at £1,000 per visa year (£364 per year for small companies and charities).

With these changes, a medium or large employer could potentially shell out a minimum of £7,000 for a single employee's 3-year sponsored work visa, not including legal advice fees and priority processing charges.

Effects on Sponsored Employees and the Employment Market

While visa costs, except the Immigration Skills Charge, can be shifted to sponsored employees, this might need to be reevaluated given the competitive nature of the recruitment market and the risk of discouraging high-potential candidates. Furthermore, sponsored employees intending to bring dependents to the UK will face these additional costs unless covered by their employers.

Looking Forward

These increased charges should be factored into future recruitment budgets, especially by UK employers heavily dependent on the non-UK/Irish workforce.

🇺🇸 Regulation Updates from New York: Implications for Global Employers

Why New York's Employment Laws Matter to the World

Even for those outside the United States, changes to employment laws in influential jurisdictions like New York State (NYS) and New York City (NYC) can provide valuable insights into potential global trends. As we see the impact of the pandemic continue to shape workspaces and as Artificial Intelligence (AI) increasingly intertwines with HR functions, these updates offer a glimpse into the future of worldwide employment regulations.

NY Warn Act: Recognizing Remote Work Reality

In response to the pandemic-induced shift towards remote work, the NYS Department of Labor has amended the NY WARN Act, changing how employee count is determined. Remote workers based at the employment site are now considered in the employee count. The updates also streamline the communication method with the Department of Labor, replacing mail and fax notices with electronic submissions via the newly launched WARN Portal.

Increased Transparency & Accountability

The amendments now require employers to provide detailed information about affected employees and changes to how the payment in lieu of notice is treated. Furthermore, invoking exceptions to the NY WARN now includes additional administrative steps, reinforcing accountability.

AI in Hiring: A Brave New World

AI is transforming HR processes globally. NYC's Local Law 144, regulating AI's use in employment, came into effect in early 2023. As of July 5, employers must perform an annual "bias audit" on automated employment decision tools (AEDTs) and provide necessary notices before use.

These trends highlight the increasing importance of data transparency, employee rights in the digital workplace, and the potential challenges of AI in HR processes. Understanding these trends as employment laws evolve globally can help employers prepare for the future. Keep an eye on these areas, as the laws in New York often precede broader trends.

To further explore, please check out the FAQ by NYC Department of Consumer and Worker Protection (DCWP).

🇦🇺 Australia Raises Minimum Wages Effective from July 1, 2023

Australia is initiating significant wage alterations from July 1, 2023, following the Annual Wage Review 2022-23. This change in the wage landscape is poised to have widespread effects on employees and employers.

Key Highlights

National Minimum Wage: It will be increased to $882.80 per week, or $23.23 per hour, impacting all employees not within the scope of an award or registered agreement.

Award Minimum Wages: These will rise by 5.75%, applicable to most employees covered by an award.

National Training Wage: It is set to increase in line with the award minimum wage increases. This includes awards pertinent to the terms under Schedule E of the Miscellaneous Award, which have an operative date of 1 July 2023.

High-Income Threshold and Compensation Cap: These will now be $167,500 and $83,750, respectively, which could affect conditions for higher-income employees.

Super Guarantee Rate: This will jump from 10.5% to 11%.

Sector-specific Changes: Supported Employment Services Award will undergo alterations, and the aged care sector will see a 15% wage boost for direct care and some senior food services employees.

For more detailed information, including new pay rate calculations, visit the official Fair Work Commission website or use the Pay and Conditions Tool. Please note that these changes come into effect from the first pay period starting on or after July 1, 2023.

Keeping abreast of these changes is crucial for maintaining fair and legal business practices. Stay informed, and stay compliant!

🇬🇧Significant Immigration Rule Changes in the UK Effective July 17, 2023

The UK government has introduced significant changes to the Immigration Rules, effective July 17, 2023. These changes touch on various aspects, including student visas, the EU Settlement Scheme, the Shortage Occupation List, and more. Understanding these changes is crucial for employers to maintain legal and compliant practices.

Key Takeaways

🇬🇧 New regulations restrict international students from switching to sponsored worker routes.

A few key points are:

Students cannot switch to a sponsored worker route until they finish their course.

PhD students can switch to a sponsored worker route after 24 months of UK study.

Students can no longer apply for permission to stay as a dependent unless certain conditions are met.

EU Settlement Scheme (EUSS): The scheme underwent several updates, including:

Automatic two-year extension for individuals with pre-settled status.

Automatic conversion of eligible pre-settled-status holders to settled status.

Changes in how late applications to the EUSS are considered.

Shortage Occupation List (SOL): The SOL has been updated to include additional occupations from the construction and fishing industries, which will benefit from lower visa application fees and salary thresholds.

Other Updates

A new "genuineness" requirement for the skilled worker, global business mobility, and scale-up routes.

An extension of the application deadline for the Ukraine Extension Scheme is until May 16, 2024.

Impact and Response

These alterations to the UK immigration regulations carry significant implications for employers. Particularly, changes to student visa rules could affect ongoing graduate recruitment programs. Therefore, an immediate evaluation of these rules is necessary. Employers should consult with immigration counsel to assess the implications of these changes and update their policies accordingly.

🇲🇾 Malaysia Refines Job Advertisement Requirements for Hiring Expatriates

Malaysia's Social Security Organisation (SOCSO) has rolled out significant modifications to the job advertisement process on the MYFutureJobs portal (MFJ). These updates, coming into effect on 15th June 2023, include the cessation of conditional exemptions for roles with specialised skills and a condensed advertising period, now 14 days.

What This Means for Employers

Advertising jobs on the MFJ portal before hiring expatriates has been a prerequisite for businesses seeking the Employment Pass (EP) for expatriates. The new guidelines, while shortening the advertisement period, have simultaneously eliminated the exemption for positions requiring unique skill sets. Therefore, HR and recruitment teams must stay updated on these changes to plan their expatriate hiring strategies optimally.

Why These Changes

The mandatory advertisement of job vacancies on the MFJ portal, introduced in January 2021, forms part of the Malaysian government's broader initiative to enhance employment opportunities for local talent. Despite this, the dearth of experienced local talent in certain sectors has necessitated expatriate hiring to bridge the skills gap.

Digging Deeper

Here are the three central changes businesses need to be aware of when planning to hire expatriates:

Advertisement Duration: Businesses must now advertise for at least 14 days, down from the previous 30-day requirement.

Reporting Process: The updated process now permits companies to submit a ‘Hiring Outcome Report' to SOCSO's designated email address ([email protected]) on the eighth day after the job advertisement, facilitating the issuance of a support letter.

Exemptions: The earlier provisions allowing the exemption for specialised or niche skills have been rescinded.

These changes serve as a reminder of the dynamic regulatory environment surrounding employment. Businesses must stay updated on these developments to ensure smooth expatriate hiring processes.

🇬🇧 Changes on the Horizon: New Legislation Impacting Employment in the UK

Several impending legislations will bring forth noteworthy changes to employment practices in the UK, encompassing aspects from redundancy and flexible work arrangements to carer's leave, neonatal care, and the fight against discrimination at the workplace. Here's a succinct rundown of these laws:

The Safeguard from Redundancy (Maternity and Family Leave) Act

Scheduled to take effect from July 24, 2023, this Act grants a lifeline to employees at risk of redundancy, providing them the right to suitable job alternatives before redundancy is confirmed. Initially limited to employees on maternity, shared parental, or adoption leave, the Act's scope has been broadened to protect pregnant employees and those recently back from the leaves described above, as well as those who have experienced a miscarriage. Awaiting precise operational details, expected by April 2024, employers should begin to ponder the potential impacts of these extended protections.

The Employment Relations (Flexible Working) Act

Currently awaiting Royal Assent, this Act proposes several transformative shifts, such as:

  1. Employees are entitled to submit two flexible working requests annually.
  2. Employers are obliged to respond to such requests within two months.
  3. Denial of a request mandates consultation with the employee.
  4. Employees are relieved from explaining the implications of the proposed working arrangement.

However, the Act doesn't sanction immediate access to flexible working, with employees still requiring 26 weeks of service to submit a request. While not legally mandatory, offering an appeal option if a flexible working request is denied remains recommended.

The Carer's Leave Act

With around 600 people quitting jobs daily due to the struggle to balance work and unpaid caregiving responsibilities, this Act, likely to be law by April 2024, introduces an annual provision of one week's unpaid leave for employee caregivers. Leave can be consumed as a single ‘block' of five days or spread out to suit individual needs. Evidence of how or for whom the leave is used is not required. In anticipation of this law, employers can consider necessary policy adaptations.

The Neonatal Care (Leave and Pay) Act

Enforced in April 2025, this Act grants parents with a newborn in neonatal care up to 12 additional weeks of paid leave, over and above their maternity or paternity leave.

Worker Protection (Amendment of Equality Act 2010) Bill

This Bill heralds significant evolution in the UK's workplace discrimination law, with fundamental changes including:

  1. Mandating employers to take active steps to prevent sexual harassment at the workplace.
  2. Reviving protection from harassment by third parties, with employers held responsible.
  3. Provide up to a 25% compensation if employers fail to prevent sexual harassment.
  4. In response to this Bill, employers may want to reassess and bolster their existing policies on Bullying and Harassment, fostering a proactive approach to tackling sexual harassment in their organisations.

🇮🇪 Expanding Reporting Duties for Irish Employers – ERR from 2024

In the 2022 Finance Act, Ireland introduced Enhanced Reporting Requirements (ERR) for employers to report specific tax-free benefits provided to employees, known as ‘reportable benefits'. This new mandate is set to kick in on January 1, 2024.

Under the ERR, employers must report tax-exempted ‘small benefits' such as vouchers or benefits up to a combined value of €1,000 and the daily remote working allowance of €3.20. Additionally, business-related travel and subsistence expense reimbursements fall under this requirement.

Revenue Online Service (ROS) will be the platform of choice for reporting. Employers must submit, correct, and amend ERR data in real-time, before or during employee payment. Employees can view this data through their myAccount from 2024.

This reporting is separate from payroll submissions, intended to protect payroll records' integrity and avoid accidental creation of new employments for reporting benefits.

To adapt to ERR, employers should start evaluating their existing systems for collating reportable benefits and determine how to integrate current IT systems with Revenue's online reporting. It's advisable to review policies on reimbursement of reportable benefits in line with legislation and Revenue guidance.

Remember, this is only Phase I – expect more employee payments and benefits to come within the scope of ERR in the future. Prepare now for a smoother transition when January 2024 arrives.

🇧🇪 Employment Law Innovations in Belgium: Strengthening Worker Protections and Toughening Sanctions

In 2023, Belgium's employment law landscape is set to evolve with many reforms. These are focused on fortifying employment stability, unifying resignation notice periods, and bolstering penalties for non-compliance with social laws. Here are the key details:

Subtitle: "Job Stability for Workers on Successive Temporary Contracts"

Effective from 8th May 2023, Belgium's Employment Contracts Act of 1978 is adjusted to boost employment stability for individuals on a series of temporary contracts, frequently referred to as "precarious contracts". Once these contracts surpass two years, the legislation stipulates that conditions typical to a permanent employment contract will take effect. This includes norms associated with a severance payment. For specific exceptions and a deeper understanding, our Belgian employment team is available for guidance.

Uniform Notice Periods Introduced

As of 28th October 2023, blue-collar workers who have been employed before 1st January 2014 will have a maximum resignation notice period of 13 weeks. The transitional provisions for employees hired before 2014 will be replaced by the standardised notice periods introduced post-2014.

Strengthened Social Penal Code

Belgium is set to revise its Social Penal Code significantly, with increased sanctions for breaches of social legislation, including prison sentences for the most severe infringements. Now, promising a foreigner to work in exchange for payment in Belgium, along with incidents of harassment, sexual harassment, or instances where a worker's health is endangered, could potentially lead to imprisonment.

Additionally, the practice of ‘social dumping' – using cheaper labour, for instance, underpaid migrant workers – has been clearly defined and included in the highest level of sanctions. A scientific committee will be formed to aid in the battle against social fraud and dumping. This committee will advise and offer recommendations to shape the inspection services' strategies and actions.

🇦🇺 Australia Rings in Major Immigration Changes from July 1

The Australian government has recently enacted numerous impactful changes to its immigration policy. These amendments, effective from 1 July 2023, could considerably reshape the landscape for foreign nationals looking to work or live in Australia.

The Implications of Changes

In April 2023, Australian Home Affairs Minister Clare O'Neil announced significant adjustments to the current migration system. These changes aim to facilitate employers in recruiting high-skill overseas workers, provide greater work flexibility for temporary migrants, and retain international students in the country. Consequently, current and prospective visa holders, expatriates, and businesses needing specialized workers may be significantly impacted. Thus, understanding these changes and adhering to the new procedures are essential.

UK Passport Holders: Eased Labor Market Testing

With the enforcement of the Australia-United Kingdom Free Trade Agreement (Australia-U.K. FTA) on 31 May 2023, UK passport holders applying for the Temporary Skill Shortage (TSS) subclass 482 visa are now exempt from the Labour Market Testing (LMT) requirements, paving a smoother path for UK nationals to work in Australia.

Revamped Working Holiday Maker Program for UK Nationals

The Australia-U.K. FTA has also spurred alterations to the Working Holiday Maker (WHM) program and the Youth Mobility Scheme, broadening opportunities for UK nationals. Key amendments include extending the eligible age limit and providing the possibility for multiple Working Holiday visas without specified work prerequisites.

Simplified Australian Citizenship for New Zealand Residents

In a significant step, New Zealand citizens who have resided in Australia for at least four years can now directly apply for Australian citizenship, bypassing the need for a permanent visa first. This change mainly benefits New Zealand citizens with a Special Category Visa (SCV) (subclass 444).

Adjustments in Temporary Skilled Migration Income Threshold (TSMIT) and Visa Filing Fees

Effective 1 July 2023, the TSMIT has increased, and numerous visa application charges (VACs) have also risen. These modifications may affect the cost calculations for individuals and businesses alike, with specific visa fees witnessing significant hikes beyond the consumer price index (CPI).

Elevated Superannuation Guarantee Payments

The Superannuation Guarantee (SG), which mandates employers to contribute a percentage of an employee's earnings to a retirement fund, has increased from 10.5% to 11% from 1 July 2023. This development impacts subclass 482 visa holders and may add to the cost of international assignments.

Visa Condition Changes for Student Visa Holders and Working Holiday Makers

From 1 July 2023, there have been adjustments to work rights for student visa holders and Working Holiday Makers, primarily in terms of permissible work hours each fortnight. Notably, student visa holders engaged in the 'aged care' sector are granted unlimited work rights until 31 December 2023.

Australia's immigration reform marks a crucial development with potentially far-reaching consequences for individuals and businesses. It further highlights Australia's dedication to building an environment conducive to attracting and retaining foreign talent.

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