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As global teams become the norm, companies are incorporating global talent pools into their people strategies. This unlocks great potential, but also exposes them to new legal landmines. In this article, we unpack what misclassification risk means for employers in APAC.
We explore how worker misclassification happens, highlight real cases where courts have acted, and share how Glints TalentHub helps companies protect themselves while scaling their teams compliantly across borders.
Misclassification happens when someone is labeled “independent contractor” (or self-employed), but in practice they behave like an employee. That misalignment can lead to all kinds of hidden liabilities: unpaid benefits, back taxes, penalties, and reputational damage. In other words, misclassification risk arises when the way a worker operates does not align with how they are legally classified.
The lesson from jurisdictions everywhere is clear: legal labels don’t trump factual realities. Courts and regulators often interpret based on how someone works, not what their contract says. This is why many businesses turn to trusted partners like Employer of Record (EOR) services to help structure compliant relationships when hiring across borders.
Here are red flags that often precede misclassification risk problems. If any of the following is similar to how your contractors operate, you might be at risk:
If these signs sound familiar, it’s a good time to review your contractor relationships and make sure they’re structured correctly. Taking preventive steps now can help you avoid costly misclassification issues later.
Let’s look at some of the cases of misclassifications risk that happened in APAC over the years.
308 Misclassification Cases in 3 Years (Singapore’s MOM & CPF)
Between 2016 and 2019, Singapore’s Ministry of Manpower (MOM) and the CPF Board recorded 308 cases of suspected misclassification (workers labeled as self-employed, but later assessed as misclassified). Of these, 160 were confirmed. That shows that Singapore regulators are actively looking for, assessing, and catching misclassification.
Also, the Tripartite Alliance for Dispute Management (TADM) receives ~45 misclassification-related claims per year; ~30% are judged valid and result in compensation advice. This isn’t just theoretical — enforcement is happening.
In this case, a worker contracted to Jurong Country Club claimed rights as an employee. The High Court emphasized that the actual working relationship must be analyzed over the contract label. In other words: even if a contract says “contractor,” if reality shows employee behavior, the court may reclassify you.
In a different dispute, the CPF Board tried to recover more than SGD 400,000 in alleged CPF arrears by treating a contractor as if they were an employee. The High Court pushed back, ruling that in that case the classification as independent contractor was legitimate. This shows two sides of the coin: courts will enforce labor protections when the facts support it, but also demand fairness in enforcement.
A Filipina paralegal, Joanna Pascua, worked remotely from the Philippines for an Australian firm and was classified as a contractor. She filed an unfair dismissal claim in Australia. The Fair Work Commission found she was, in fact, an employee under Australian law.
Key findings:
This case is a real warning: even remote, cross-border work doesn’t always shield you from classification liability. A trend also seen in Australia’s new contractor laws that have reshaped how companies manage remote teams.
These rulings send a clear message: regulators and courts across APAC are paying close attention to misclassification risk.
No matter whether your workers are based overseas or remote, the key issue is how the employment relationship actually functions in practice. Regulators will look behind titles and contracts to assess whether someone functions like an employee in practice.
To stay compliant, every firm that invites in foreign talent must develop an actionable model of hiring, a model that harmonizes legal requirements with the nature of on-the-ground practice.
Building a compliant, low-risk setup does not have to be complicated. Here’s a game plan to protect your business:
At Glints TalentHub, we don’t just help you hire faster, we also help you hire smart. We evaluate classification risks for each role and market, ensure contracts and workflows align with local employment laws, and manage compliance on your behalf from onboarding to payroll, so you stay nimble and protected.
This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.
Glints TalentHub offers an end-to-end, tech-enabled talent solution that encompasses talent acquisition, EOR, and talent development. We empower businesses to leverage the strengths of regional talent efficiently to build high-performing, cost-efficient teams.
Schedule a no-obligation consultation with our experts to receive a tailored proposal today!
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