Amendments to Taiwan’s Labor Standards Act passed by the legislature on 10 January 2018, after much controversy, protest and debate. Generally speaking, these amendments roll back or relax changes which were made to the law at the end of 2016, and may be amended, or clarified, further. The effective date of these amendments is 1 March 2018.

Overtime & Annual Leave

1. The wage for overtime on flexible rest days will be calculated as actual time worked, rather than in four-hour blocks as before. This overtime should be factored into the maximum monthly overtime for each employee, detailed in the next item.

2. Overtime may be calculated over a three month period by employers, and may not exceed 54 hours in one month and 138 hours in three months. In order to implement such an overtime policy, the employer must obtain consent from the relevant labor union or, if there is no labor union, the approval of a labor-management conference. If the company has 30 or more employees, this change must be reported to the local labor authority.

3. If the employee chooses to convert their overtime hours into make-up leave and this is agreed to by the employer, the make-up leave must be equal to the hours of overtime worked. The deadline for make-up leave shall be negotiated by the employer and employees. Furthermore, any remaining make-up leave must be converted back into payment for overtime and given to the employees upon its expiration or upon termination or voluntary resignation.

4. The employer and the employee may agree to carry over unused annual leave to the next year. However, any remaining annual leave must be converted into wages and paid to the employee at the end of the second year or upon completion of the employment contract.

Shift work

5. The employer may shorten the rest time between shifts from eleven to eight hours for those industries or businesses designated by the Ministry of Labor (“MOL”). To implement this change, the employer must obtain consent from the relevant labor union or, if there is no labor union, the approval of a labor-management conference. If the company has 30 or more employees, this change must be reported to the local labor authority.

6. Employers from those businesses or industries that are designated by the MOL and which have obtained consent from the central Competent Authority, may change the placement of an employee’s mandatory rest day. This adjustment allows the employee to work a maximum of 12 consecutive days. To implement this change, the employer must obtain consent from the relevant labor union or, if there is no labor union, the approval of a labor-management conference. If the company has 30 or more employees, this change must be reported to the local labor authority.
Once the new rules come into force, it is likely that government authorities will issue clarifying interpretations on how they expect employers to implement the new rules. It is therefore suggested that employees and employers pay particular attention to these developments.

For more information on Taiwan employment matters, please contact Christine Chen at cchen@winklerpartners.com or +886 (0) 2 2311 8307.