Labor Standards Act Amendment
An amendment to the Labor Standards Act (LSA) in Taiwan went into effect on December 23, 2016. The newly performed amendment to the LSA includes weekly days off, overtime payment, annual leave, etc. Here is a brief summary of the amendment as follows:
I. One fixed day off and one rest day per week for workers (LSA Art. 36):
There are two days off for every seven days, one of which is a “fixed day” and the other is a “rest day.”
- Fixed day: It is a mandatory holiday. Workers are not obliged to work on fixed days off unless owing to a natural disaster, accident or emergency. If doing so, employers should pay the wage and give a compensatory holiday afterwards (LSA Art. 40).
- Rest day: Workers can work on rest days if companies offer them to work. Companies need to pay for a higher wage for rest days.
Employers can use a flexible system of working hours. Fixed days off and rest days can be arranged as follows:
- Two-week flexible working-hour system: at least 1 fixed day off every 7 days; at least 4 days of fixed days off and rest days every two weeks
- Four-week flexible working-hour system: at least 2 fixed days off every 2 weeks; at least 8 days of fixed days off and rest days every four weeks
- Eight-week flexible working-hour system: at least 1 fixed day off every 7 days; at least 16 days of fixed days off and rest days every eight weeks
II. Higher overtime payment on REST DAY (LSA Art. 24):
- work within 2 hours: be paid at an additional one and one-third of the regular hourly rate
- work in the following hour: be paid at an additional one and two-third of the regular hourly rate
Overtime hour calculation:
- work for 4 hours or less: be counted as 4 hours
- work for more than 4 hours to 8 hours: be counted as 8 hours
- work for more than 8 hours to 12 hours: be counted as 12 hours
Example: There is an employee A whose monthly salary is NTD 36,000 and the regular hourly wage is NTD 150. If A works on a Rest Day, his payment for the day should be calculated as follows:
- If work for 1 hour: It should be deemed as 4 hours. The calculation of the payment should be: 150 × 1 × 2 + 150 × 1 × 2 = 900. His wage should be NTD 900.
- If work for 4 hours: The calculation of the payment should be: 150 × 1 × 2 + 150 × 1 × 2 = 900. His wage should be NTD 900.
- If work for 8 hours: The calculation of the payment should be: 150 × 1 × 2 + 150 × 1 × 6 = 1,900. His wage should be NTD 1,900.
- If work for 10 hours: It should be deemed as 12 hours. For a period of 9 to 12 hours, the original wage should be paid additionally. The calculation of the payment should be:
150 × 1 × 2 + 150 × 1 × 6 + 150 × 2 × 4 = 3,500. His wage should be NTD 3,500.
Overtime hours including on rest days, cannot exceed 46 hours monthly, and cannot exceed 12 hours daily, unless in case of a natural disaster, accident or emergency.
III. National holidays (LSA Art. 37): There are 12 national holidays per year instead of 19 in the past.
IV. Annual leave (LSA Art. 38):
- 3 days for the service of six months but less than one year
- 7 days for the service of one year but less than two years
- 10 days for the service of two years but less than three years
- 14 days for the service of three years but less than five years
- 15 days for the service of five years but less than ten years
one additional day for each year of service over ten years up to a maximum of thirty days
Arrangement: Annual leaves are appointed by employees generally, but employers can negotiate with employees in consideration of urgent operational needs or personal reasons.
Unused annual leave: It should be paid at the end of the year (except in case of specific agreement) or upon the termination of the employment contract. It’s calculated based on regular daily wage.
Annual leave record: Employers shall document each worker’s annual leave and days of unused annual leave on the payroll roster, and notify workers of such information in written form every year.
Burden of proof: If any of the parties have any dispute over the wage for unused annual leave, employees should provide the evidence.
V. Provision of detailed wage calculation statements (LSA Art. 23):
Employers should provide workers with detailed statements of wage calculation method and incorporate information into the payroll roster.
VI. Rest time for shift workers (LSA Art. 34): Shift workers should get at least 11 hours of rest before working another shift.
VII. Strengthen the protection of labor rights to file complaints (LSA Art. 74):
An employer shall not discharge, transfer, deduct wages, cause damage to a worker's rights under any statutes, contracts, or practice, or take any unfavorable measure against a worker who files a complaint. If doing so, an employer’s action will be deemed invalid.
The authorities shall investigate into the complaint and notify the worker in writing within 60 days of receiving a complaint. They shall protect a worker’s identity from being exposed. If identity is disclosed, the authorities shall be liable for any loss suffered by the worker.
VIII. Increase in penalty (LSA Art. 79):
Employers in breach of annual leave, overtime wage or other regulations in the LSA should be fined at the amount of NTD 20,000 to NTD 1,000,000, which exceeds the pre-amendment maximum amount of NTD 300,000.
Disclaimer: all information enclosed hereby shall not be interpreted as any legal opinion, but is intended only to provide general information to their intended recipients. They shall not be used to create any legal effect without consulting a professional legal professional. Any use against these guidelines shall not bind the author(s) of this presentation in any way.
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