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New Labor Law in Taiwan effective March 1st, 2018

February 23, 2018

LABOR STANDARDS ACT AMENDMENTS

 

The amendment to the Labor Standards Act (LSA) passed the Parliament of ROC on Wednesday January 10, 2018. The amendment is expected to be implemented and taken into effect on March 1, 2018

 

The tables below shall give you a brief overview of the upcoming modifications.

 

 

Overtime Work compensation on a rest day (LSA Art. 24/2)

 

Pre- amendment

The time and wage computation are to be done using the following basis:

1. When the overtime work does not exceed 4 hours, it shall be computed as 4 hours

2. When the overtime is in excess of 4 hours and under 8 hours, it shall be computed as 8 hours

3. When the overtime is in excess of 8 hours and under 12 hours, it shall be computed as 12 hours

 

Post- amendment

Due to the current amendment, overtime hours will not be calculated in 4/8/12 hour’s increments anymore, but in actual hours worked.

So, every overtime hour will be paid individually again, as it was the situation before the amendment of December 23, 2016.

Note: Payment calculation for overtime on a rest day remains the same

1. Until 2 hours: an additional one and one-third of the regular hourly rate

2. Beyond 2 hours: an additional one and two-third of the regular hourly rate

 

 

Overtime Work (LSA Art. 32)

 

Pre- amendment

The total number of overtime shall not exceed 46 hours a month. This regulation can be overruled in case of occurrence of higher force, an accident or an unexpected event.

 

Post- amendment

The amendment is going to increase the cap of total overtime hours from 46 hours per month to 54 hours per month, provided that total overtime hours do not exceed 138 hours in a period of 3 months.

Prerequisite of this action is an approval of the labor union*1, or if there is no labor union in a business entity, with the approval of the labor-management*2.

If a company has more than 30 employees, the approved proceeding has to be reported to the authorities.

 

 

 

Compensatory time-off (LSA Art. 32-1)

 

Pre- amendment

There was no rule regarding Compensatory time-off before.

 

Post- amendment

In order to compensate overtime work there are two different options. Either monetary compensation or compensatory time-off.

 

The employer and the individual employee can choose which option shall be applicable.

The duration of Compensatory time-off will be exactly the same as the performed overtime work.

 

 

Rest Time for shift workers (LSA Art. 34)

 

Pre- amendment

Shift workers should get at least 11 hours of rest before working another shift.

 

Post- amendment

Employers are now authorized to reduce the stipulated rest time to between eight and 11 hours. The rest time can only be scheduled below 11 hours, by specific reasons or the nature of work. The authorities will publish further explanations regarding this paragraph soon.

 

Prerequisite of this action is an approval of the labor union, or if there is no labor union in a business entity, with the approval of the labor-management.

If a company has more than 30 employees, the approved proceeding has to be reported to the authorities.

 

 

Regular day off and rest day (LSA Art. 36)

 

Pre- amendment

A worker shall have 2 regular days off within every seven days: One is a regular leave and the other one is a rest day.  Employers shall not require employees to work on their regular day off, whereas they can demand additional working hours on rest days, provided the labor unions or labor-management council’s consent.

Certain industries, which got designated by the Central Competent Authority, upon the consent of its labor union, or if there is no labor union in a business entity, with the approval of a labor-management conference, an employer may change his/her working hours. Workers who adjust their regular working hours shall have a minimum of two days of regular leaves every fourteen days. (Art. 30-1 and 36)

 

Post- amendment

Certain industries have now the option to adopt a biweekly work roster. Employees will be able to adjust their workdays and days off within a period of 14 days instead of 7. This allows employees to work 12 consecutive days. It will be prohibited to work more than eight hours per day within this period.

Prerequisite of this action is an approval of the labor union, or if there is no labor union in a business entity, with the approval of the labor-management.

If a company has more than 30 employees, the approved proceeding has to be reported to the authorities.

It is not determined yet, which industries will be designated by the authorities.

As we can see, it was already possible to work 12 consecutive days before the new amendment. We will see if the scope of eligible industries changes.

 

 

 

Carrying forward annual leave (LSA Art. 38)

 

Pre- amendment

Monetary Compensation must be paid for annual paid leaves, which were not used by the employees, either at the end of the calendar year or because of the termination of the employment contract.

It was not possible to carry forward annual leave after the termination of a calendar year.

 

Post- amendment

The amendment stipulates a one-year extension of validity of unused annual leave days.

After this period (the year the annual leave belongs to and the year of extension) the remaining unused annual leave shall be converted into a monetary compensation.

If an employee departs, the employer has to monetarily compensate any unused annual leave.

 

 

*1 Labor Union:

All workers shall have the right to organize and join labor unions. A labor union is a juristic person and shall have directors and supervisors.

Labor unions can be classified into the following three types

  1. Corporate union

a labor union organized by employees of the same factory or workplace, of the same business entity

  1. Industrial union

a labor union organized by workers in the industry

  1. Professional union

a labor union organized by workers with the same professional skills

 

A labor union shall be organized by the signatures of no less than thirty workers. There are neither rules on compulsory organization of a labor union nor on compulsory membership of employees.

Less than 10% of employees in Taiwan are part of a labor Union.

 

 

*2 Labor Management:

A business entity shall hold meetings to coordinate worker-employer relationships. In case of a branch office with more than 30 employees, this office is required to convene its own labor-management meeting.

The labor-management meeting shall be organized by equal number of representatives from both the labor and the management sides, each side shall have 2 to 15 representatives in the meeting depending on the number of persons in the business entity. The representatives of labor-management meeting shall coordinate and cooperate in meetings to improve labor-management relations and protect the rights and interests of the employees. The labor-management meeting shall be convened at least once every 3 months, if necessary an ad hoc meeting may be held. However, there will be no punishment, in case of violation of the aforesaid rules.

 

 

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.

Copyright 2018.  All rights reserved.

 

 

 

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