The fourteen countries that make Oceania are a collective of islands spanning between Asia and the Americas. Its four regions are Australasia, Polynesia, Micronesia, and Melanesia and are home to diverse environments and people, that provide an array of business sectors and opportunities.

The service industry is the largest sector in Oceania, with tourism education and financial services being the most significant. Other key industries are manufacturing, mining, and agricultural production that is made possible from the myriad of accessible natural resources. The geographic location of Oceanic countries and the variants of resources has generated a need for trading, leading to a mix of economies, from the less developed, to the highly developed markets of Australia and New Zealand.

But with so many countries, each with distinct labor laws, conducting business in compliance can become difficult. That’s why its crucial to familiarize oneself with the requirements countries put in place to protect employees and employers.

Australia

Located in the Southern Hemisphere and divided into six states and two territories, Australia is country of 24.6 million that is both culturally diverse and booming in natural resources. Its trade agreements with APAC countries and its location to the region provide significant business opportunities.

Working Hours

Full time is considered 38 hours weekly. Overtime payment differs between hourly paid workers and salaried employees. When overtime is paid, it is usually 1.5 times the normal rate. For salaried employees overtime policy should be stated in their contract. Providing a re4asoable amount of unpaid overtime or working longer hours if required is common.

Advanced Notice

Notice period in Australia depends on the seniority of the employee.

• 1 year or less – 1 week
• 1 to 3 years – 2 weeks
• 3 to 5 years – 3 weeks
• More than 5 years – 4 weeks

Severance Pay

Payment for severance is determined by the continuous period of service by an employee, and pay rate is given for ordinary hours worked.

• 1 year but less than 2 years – 4 weeks
• 2 years but less than 3 years – 6 weeks
• 3 years but less than 4 years – 7 weeks
• 4 years but less than 5 years -8 weeks
• 5 years but less than 6 years – 9 weeks
• 6 years but less than 7 years – 10 weeks
• 7 years but less than 8 years – 11 weeks
• 8 years but less than 9 years – 13 weeks
• 9 years but less than 10 years – 16 weeks
• At least 10 years – 12 weeks

Payroll Cycle/Date

Payroll in Australia can be set to bi-weekly or monthly. There isn’t a legal date that payments need to be paid, but the standard is typically the 15^th and 30^th for bi-weekly payments or between the 28^th-30^th for monthly payments.

Employer Social Security Contributions

Employers are obligated to contribute to the superannuation fund or retirement savings account. The contribution rate is 9.5% of employee’s ordinary earnings and are based on maximum earnings of AUD 54,030.

For more detailed guidance see our Australian payroll and benefits guide

New Zealand

Known for its ease of doing business, New Zealand currently ranks #1 on the list due to the minimal constrains the government places on business. This means starting a business, hiring workers, obtaining permits and other business procedures are faster and simpler than any other country.

Working Hours

A full workweek is considered 40 hours, with the majority of employees working between 38 and 40 hours. The amount employees are paid for their extra hours is usually determined by employers and specified in the working contract that employees sign. Legally, employers are not obliged to pay employees more than their regular hourly pay, but companies may agree to pay at a time and half or at a double time rate for any overtime work.

Advanced Notice

Employers and employees are both required to give an advanced

notice as specified within their contracts. The only time advanced

notice isn’t necessary is when dismissal is due to serious

misconduct.

Severance Pay

Employees are entitled to severance pay when they are dismissed or leave voluntarily. Their final pay includes, payment for all the hours worked since the last pay date, payment for annual holidays, and any additional owed payments. Additional payments are either specified in the employment agreement or negotiated as a part of leaving package. If employees do not receive all components of their payments, they may file a claim for unpaid salary or other breaches of the employment agreement.

Payroll Cycle/Date

Employee wages can be paid either weekly, biweekly or monthly. The specific date and period should be predetermined and written in the employees’ contract as there isn’t a specific regulated date.

Employer Social Security Contributions

Employers aren’t required to contribute to social security unless the employee has decided to opt into the KiwiSaver superannuation scheme. If the employee does decide to enroll to the scheme, employers must match their contribution. Contribution rate can be chosen and deducted at a rate of 3%, 4% 6%, 8% or 10%.

For more detailed guidance see our New Zealand payroll and benefits guide

Fiji 

Fiji in one of the most developed economies in the region and is located in a strategic location that allows for operational benefits for businesses. But although it is one of the most developed it still is a country that relies on is agricultural sector. The islands that make up Fiji do have an abundance of natural resources that allow it to export water, sugar fish and minerals to the United States, Australia, New Zealand, Japan, and China. Fiji also attracts tourism that boosts its economy.

Working Hours

An employment contract should state the number of hours an employee should work, and not be over 48 hours, excluding overtime. Employees should either work nine hours, five days a week, or eight hours, six days a week.

If daily hours exceed nine, then overtime should be paid at time and a half. Employees working Sunday should receive double time.

Advanced Notice

An employer must provide a notice of at least one week or a payment in lieu of notice unless the employee has been terminated for wrongful acts.

These acts include:

• Drunk while on duty,
• Late to work
• Failure to report any accident caused to the vehicles by a driver who is on duty. Checked or examined the vehicle before using and report any damages to the Transport Officer.
• The CB must be on every time for any communication with BPA
• Comply with the speed limits
• Compliance with route of the bus which has been decided.

Severance Pay

Employees who are terminated or made redundant receive a lump sum payment, and receive payments for accumulated annual leave, long-service leave and sick leave.

Payroll Cycle/Date

Employees receive payments at the end of the moth, typically on the 24^th.

Employer Social Security Contributions

Employers contribute 10% to the Fiji National Provident Fund (FNPF) which is a compulsory superannuation scheme that provides two types of accounts for its members. The first is a Preserved account that is used for old age pension, and the other is a general account used for medical, unemployment, housing or other expenses.

Papua New Guinea

Papua New Guinea is located on the eastern side if New Guinea and part of the second largest island in the world. It is a rural country filled with natural resources, with agriculture providing livelihood to 85% of its citizens. Its main exports are petroleum gas, and minerals such as gold and copper, with most of goods going to Australia, Japan, and China.

Working Hours

A typical workweek is 42 hours. Employees usually work eight hours per day Monday thru Friday, and two hours on Saturday morning.

Overtime is permitted but daily work should not exceed 12 hours. Payments for overtime should be made to the employee within seven days on which normal wages are paid.

Advanced Notice

Notice of termination is required by the employment act.

• 1 day notice if the employee has been employed for less than 4 weeks.
• 1 week notice if the employee has been employed for not less than 4 weeks and less than 1 year.
• 2 weeks’ notice if the employee has been employed for not less than 1 year and less than 5 years.
• 4 weeks’ notice if the employee has been employed for 5 years or more.

Severance Pay

Employees who are terminated or made redundant receive a lump sum payment and receive payments for accumulated annual leave, long-service leave, and sick leave.

Payroll Cycle/Date

Employees in Papua New Guinea get paid monthly, with the minimum wage set at k3.5 an hour or k140.8 a week.

Employer Social Security Contributions

Employers are required to make contributions to the superannuation fund if they have fifteen or more employees. The contribution rate is 8.4% of the employee’s gross salary.

Indonesia

Indonesia is a country consisting of 17,508 Islands located between the Indian Ocean and the Pacific Ocean, and the fourth most populous country with a population of about 270 million. Like many countries in the region, Indonesia has an abundance of natural resources; exporting coal, palm oil, petroleum gas, and rubber worldwide.

Working Hours

A typical workweek in Indonesia is forty hours and is made up of seven or eight daily hours depending on if an employee works six or five days a week. These hours are regulated with Ministerial decision; however, these work hours do not apply to certain businesses.

For overtime, employees must agree to work longer hours, but are not permitted to work more than 3 extra hours a day and 14 extra hours per week. The Labor Law and Overtime Regulations require employers to meet the following conditions:

• Employers must write a written order for the performance of overtime hours.
• Employee, on his or her part, should write the written consent to work extra hours.
• Employers must pay overtime wages.
• Employers must provide suitable conditions of resting for employees working extra time.
• Employers should provide drinks and food to employees who work extra 3 or more hours.

The calculation of overtime payment is based on the employee’s monthly wage – basic wage and fixed allowances. The calculation of overtime wage is done according to the following considerations:

• If employees work overtime during weekdays, they receive one and a half times of their hourly wage for the first overtime hour. For every subsequent overtime hour, they receive wages paid at two times the hourly wage.
• If employees work overtime on a weekly rest day or any public holiday falling on a weekly rest day while working a six-day work week, their overtime payment is calculated as follows: The first seven hours is two times the hourly wage, the eighth hour is three times the hourly wage, and the ninth and tenth hour is four times the hourly wage
• If employees work overtime on a weekly rest day landing on a weekday when working a six-day work week, their overtime payment is calculated as follows: The first five hours are two times the hourly wage, the sixth hour is three times the hourly wage, and the seventh and eight hours are four times the hourly wage.
• If employees perform overtime work on a weekly rest day or a public holiday working a five-day work week, their overtime payment is calculated in this way: The first eight hours are two times the hourly wage, the ninth hour is three times the hourly wage, and the tenth and eleventh hours are four times the hourly wage.

Indonesian Employees who hold high-level positions and whose working time cannot be restricted by hours are not eligible to receive overtime payment.

Advanced Notice

There is no law that specifies notice periods for employee’s dismissal from work. In practice a 30-day notice is given to the employee to terminate his or her employment contract.

Severance Pay

Employees who are discharged from their job are entitled to receive payment.

• Less than 1 year of employment – 1-month wage
• 1 year or more, but less than 2 years – 2 months wage
• 2 Years or more but less than 3 years – 3 months wage
• 3 years of more, but less than 4 years – 4 months wage
• 4 years or more, but less than 5 – 5 months wage
• 5 years or more, but less than 6 – 6 months wage
• 6 years or more, but less than 7 – 7 months wage
• 7 years or more, but less than 8 – 8 months wage
• 8 years or more – 9 months wage

Payroll Cycle/Date

Employees are paid monthly typically between the 5^th and the 15^th.

Employer Social Security Contributions

Social security in Indonesia is comprised of two schemes, the manpower scheme and the healthcare scheme.  These schemes provide coverage for old age pension, disability, survivors, medical benefits, workman’s compensation. Employer contribution rates are 4% for healthcare, 3.7% for old age pension provident fund, plus 2% social insurance, .24%-1.74% for work accident and .3% for death.

For further detailed guidance see our Indonesia payroll and benefits guide