Taiwan: Things Companies Need To Prepare For Labour Inspection In Taiwan

Last Updated: 21 May 2018
Article by Angela Wu

The amendments to Taiwan's Labour Standards Act has been passed at the Legislative Yuan in January 2018 and authorities will be carrying out onsite inspection to ensure companies follow the new rules regulations.

After our Labour Ministry crackdown on companies in Taiwan (Part 1) article, here are the important things companies need to be aware of and prepare to comply with the changes in Taiwan.

List of documents and compliance steps required during labour onsite inspection in Taiwan

  • Employment contracts based on the agreement of both employer and employee
  • Employee cards/reports that contain details such as full name, address, education background, identification number, employment insurance, starting date, rewards and other relevant information
  • Attendance records
  • Wage records, including wage type, calculation, amount, entitled annual leave and payment for untaken leave
  • For company adopting flexible shifts, ladies working night shift and long-working hour system, union consent must be obtained. If no union, consent from labor & management meeting is required. If employee number is more than 30, such record must be submitted to local authority.
  • Registration of Labour insurance

Compliance checklist for companies in Taiwan on labour onsite inspection

The latest revision states the changes in overtime hours, wage calculation, rest-day and rest hours. Here are the key changes companies in Taiwan need to be in compliance with as below.

  1. Companies must maintain all labour documents as mentioned above in good shape for at least five years from employee's last working day
  2. Contract, part-time and project-based labours must be treated according to Taiwan's Labour Law Article 9. A worker's regular working hours plus overtime hours should not exceed 12 hours per day. Maximum overtime hours should not exceed 46 hours per month.
  3. Maximum working hours can be changed from 46 hours to 54 hours per month and 138 hours for every three-month period, subject to union consent. If no union, consent from labor & management meeting is required. If employee number is more than 30, such record must be submitted to local authority.
  4. Overtime payment on rest day will change into calculating the real hours an employee has worked moving forward after the revision. Overtime rate has not changed which translates into one and one-third of the regular hourly rate for the first two hours, increasing to one and two-thirds of the regular hourly rate from the third hour onwards. Both employer and employee may agree on opting for either getting overtime payment in salary or replacement rest day at a minimum ratio of 1:1 and set a deadline to use the rest day accordingly. If the agreed time off is not used by the end of the agreed deadline or due to employment termination, the employer must pay the employee accordingly.
  5. Employers should ensure employees' regular working hours are not more than eight hours a day and 40 hours a week. They should also ensure employees get at least 30 minutes of rest time after four hours of continuous work.  If overtime is required, employers must pay overtime based on related regulation.
  6. Some companies approved by government may adopt the new policy that allows the employees to work on a continuous 12-day routine. Nonetheless, employers in the industries not on the list approved by the government or do not get government's approval and employees' consent, the five-day workweek with one "rest day" and one "regular leave day" every seven calendar days practice shall stay. However, employers must transfer any remaining untaken leave to wages and compensate employees at the end of the next year or upon employment termination by either parties. This will allow flexibility to both employers and employees in terms of utilising the annual leaves.
  7. Employers must adopt shift structure for employees and ensure a minimum 11 hours of rest in between shift transition for every employee. Under the new act, approved business sectors can shorten employees' work schedule from 11 hours to minimum of 8 hours, subject to union consent. For industry with no union, employers must get consent from labour and management meeting to apply this new policy. As for company with or more than 30 employees, employer must clarify with local authority.
  8. Employees can enjoy public holiday as stated by the government in Taiwan. Those who will be working during holiday are entitled to get paid based on overtime pay structure as mentioned above.
  9. Female employees can work from 10pm to 6am with the approval from workers' Union, safe environment, and transportation or accommodation offered by the employers. Female workers should get access to enjoy maternity leave as stated in the law at the phase of before, after birth or even miscarriage.
  10. For employees who choose to adopt the older retirement scheme, their retirement savings should have been fully appropriated to labor pension account at the end of 2017 by the authority. For any deficiency, the balance shall be appropriated by the end of March 2018. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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