We all know how important it is to keep up to date with legislative updates to ensure compliance. If you’re part of a global organisation, keeping yourself up-to-date with goings on across the world is vital.
Here at Immedis we have our finger on the pulse when it comes to these matters and are going to take you on a road trip of some recent country updates that you should make yourself aware of.
First stop Africa! Any organisation with employees in Zambia need to be aware of the following Severance Pay Provisions in 2020:
- Employees on fixed term contracts are entitled to either a gratuity at the rate of not less than 25% of the employee’s basic pay earned during the contract period or the retirement benefits provided by the relevant social security scheme that the employee is a member of.
- Where a contract of employment of a fixed duration has been terminated, an employee is entitled to a gratuity at the rate of not less than 25% of the employee’s basic pay earned during the contract period as at the effective date of termination.
- An employee whose employment is terminated on medical grounds is, in addition to any other accrued benefits, entitled to a lump sum of not less than three months basic pay for each completed year of service.
- Where an employee dies in service, the severance pay will be two months basic pay for each year served under the contract of employment.
Moving across to Asia Pacific and looking specifically at Australia there are two key pieces of information to take in to account:
- There will be a change to how superannuation will be calculated around salary sacrificing. As an example, currently on a $1,000 gross payment, if 20% is being salary sacrificed, then the superannuation can be calculated on either $800 or $1,000, whichever the employer prefers. As of 1st January 2020, the employers must pay it on the higher amount of $1,000.
If you’re an Immedis customer, you can rest assured that you are already compliant with this right now, as we are currently paying the superannuation on the higher amount. We would encourage others to check with their payroll provider to ensure this is the case if not currently aware.
Single Touch Payroll (STP)
- In order to ensure compliance, organisations here will now have to be registered with the authorities in order to avail of STP. For those unfamiliar with this initiative, STP requires organisations to report payroll information to the Australian Tax Office after each payroll run. Having a payroll solution in place will give companies ease of access to reports required and, ultimately, remain compliant.
Jumping into Latin America and Regulatory Updates in Colombia for 2020, the following information should be noted in relation to minimum wage.
As a result of the lack of agreement on the topic of the minimum wage, decrees No. 2360 and 2361 of 2019 were issued on 26thDecember 2019 for 2020. The minimum wage from 1st January 2020 will be COP 877.803 representing an increase of 6% on 2019. In addition, the government confirmed transportation assistance at COP 102,854 for those who receive an income in the month below COP 1,755,606 representing an increase of 6% on 2019.
One of the direct consequences of this increase in the minimum wage is the increase in the amount from which wages can be agreed under the modality of integral salary, that is, that the agreed salary includes social benefits (severance, interest and premiums). The basis of this remuneration is 13 times the wage amount, so it is necessary that the base to be able to agree on an integral salary amounts to COP 11,411,439 in 2020, which includes 30% of the benefit charge, indicated in the Law.
It should be noted that if any workers have agreed to date the legal minimum wage or the integral minimum wage, the new salary will automatically be reflected on the payroll of the month of January, this in order to comply with the regulations.
For more legislative updates from across the globe, take a look at our most recent blogs.