During the initial stages of establishing a multinational factory, labor laws are often the area that Taiwanese businesses most easily overlook and misunderstand. Many companies assume that "employment practices are similar to those in Taiwan," but the reality is quite different.

👉 Reminder: Labor laws cover minimum wage, overtime pay, contracts, insurance, and foreign employment, each of which may pose compliance risks.

Essential Compliance Points You Must Know

1. Minimum wage and working hours

Vietnam: Starting in 2025, the minimum wage will be adjusted according to region: 4,960,000 VND per month for Region 1, 4,410,000 VND per month for Region 2, 3,450,000 VND per month for Region 3, and 3,400,000 VND per month for Region 4; overtime pay shall not be less than 150% of the normal wage.

Thailand: The basic wage will be adjusted to 337–400 THB per day in 2024, with slight variations depending on the region.

Indonesia: The minimum wage is announced annually by each provincial government. In 2025, the monthly salary in Jakarta province was approximately 5,400,000 Indonesian Rupiah.

👉 Recommendation: Before signing an employment contract, companies should review the latest announcements from the local government and retain a salary adjustment mechanism.

2. Employment Contracts and Dismissal Regulations

Most ASEAN countries require written labor contracts and specify the length of the probationary period (e.g., Vietnam's maximum is 60 days).

- If an employee is dismissed illegally, the company must pay compensation and may even face labor lawsuits.

👉 Recommendation: Contracts should include a version in the local language and be reviewed by a lawyer or consultant to ensure their legal validity.

3. Restrictions on the Employment of Foreign Employees

- Indonesia: Companies must first obtain an RPTKA (Expatriate Placement Plan) . After submitting an application and receiving approval, the company then proceeds with the Notification or equivalent procedures as part of its work permit and residence visa (such as VITAS/KITAS). Foreign employees without an RPTKA approval or who have not completed the Notification process will not be able to work legally in Indonesia.

Vietnam: Foreign workers must obtain a work permit and prove that local talent is not qualified for the job.

👉 Recommendation: Allow sufficient time for application to avoid supervisors or technical personnel being unable to start work due to permit delays.

4. Labor insurance and social welfare

- Vietnam: Employers are required to pay social insurance, medical insurance and unemployment insurance for their employees, at a rate of approximately 21.5% of their wages.

Thailand: The mandatory social insurance rate is 5% of salary, with employers and employees each contributing half.

Failure to pay as required will result in the recovery of the payment and possible fines.

👉 Recommendation: Establish an automated HR/payroll system to ensure accurate and timely insurance payments.

The challenges posed by labor laws go beyond mere legality; they also concern a company's image and stable operations. Companies should focus on the following three layers of protection:

- Consulting services: Combining local lawyers and HR consultants to assist with contract review, termination procedures, and insurance payment verification.

- System support: The HR/payroll module has built-in minimum wage and overtime pay calculation rules for various countries and automatically updates policy changes.

- Compliance monitoring: Remind employers to regularly adjust wages, insurance contributions, and the expiration of work permits for foreign employees.

💡 Reminder: Compliance is not an extra burden, but a "protective umbrella" that safeguards businesses from unexpected risks.

Frequently Asked Questions (FAQ):

Q1: Is the minimum wage adjusted every year?

A: Yes. Vietnam and Indonesia usually issue annual announcements through their governments or provincial authorities, while Thailand reviews them based on its economic situation.

Q2: Can Taiwanese managers not apply for local work permits?

A: No. Foreign nationals must apply for work permits in accordance with the law; otherwise, both the employer and the employee may be penalized.

Q3: Must employment contracts be in the local language?

A: Most countries require the use of the local language version, or at least a bilingual contract, otherwise the validity of the contract may be limited.

[External Reference Source]

- Vietnam Labor Code 2019 (Amended 2024)

- Thailand Social Insurance Office https://www.sso.go.th

- Indonesian Ministry of Manpower (https://kemnaker.go.id)

⚠️Reminder : This article is for general informational purposes only. Actual regulations may vary depending on updates to laws in different countries. Please refer to the latest announcements and official documents from your local government.

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