Nicolas Tang, of Farallon Law, outlines the legal risks and best practices for reshaping benefits
HR leaders need to tread carefully when making changes to employee benefits, as it can lead to substantial legal and reputational risks, says Nicolas Tang, managing director of Farallon Law Corporation.
Employers in the Asia-Pacific region are facing pressure to rethink employee benefit strategies as rising costs make it harder to maintain expansive packages. As a result, many companies are considering reallocating benefits, with mental health remaining a key area of focus for improvement. But making these changes is no simple task.
"Modifying or removing employee benefits in APAC markets is a sensitive and complex exercise," Tang says. "Employers must consider the legal implications, employee morale, and the cultural context of each jurisdiction."
One of the primary risks involves legal and regulatory compliance, especially in markets with stringent employment laws like China, Singapore and Indonesia. These countries have statutory benefits that employers are legally required to provide and reducing or eliminating them can result in severe consequences.
"In Singapore, statutory benefits are non-negotiable," Tang explains. "Employers are expected to find ways to maintain them, regardless of financial pressures."
In countries like China, the obligations are just as strict. Employers are required to contribute to five core...
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