Labor Standards Act: Legislative Yuan Amended Labor Standards Act on 6 December 2016.

[2016/12/20]

On 6 December 2016, the Legislative Yuan enacted amendments to the Labor Standards Act (勞動基準法, LSA), intended to enhance protection of workers’ rights. Aside from certain provisions for which the amended Act sets other dates for implementation, the amendments will take effect three days after promulgation by the President. The main points of the amendments are outlined below:

1. One regular day off and one rest day per week: The amended Article 36 of the LSA provides that in every seven days, workers shall have at least one regular day off, and one rest day. The “regular day off” is a mandatory requirement: except in extremely unusual circumstances, such as a natural disaster, accident or unforeseen emergency, an employer shall not have any worker to work on their regular day off. Working on a regular day off without the extreme circumstances be illegal even if the worker agrees to such working. The rules for working on the “rest day” are relatively more flexible: such working is treated as overtime, and after obtaining the agreement of the labor union or a worker–management meeting in accordance with the provisions of the LSA, an employer may, in accordance with the relevant statutory provisions, seek workers consent to work on their rest days.

2. Increased overtime pay rates for rest-day working; rest-day working to count toward monthly overtime hours:
  (1) An employee who works on a rest day for up to two hours shall be paid at the wage rate for regular working days plus at least one-and-one-third (1⅓) times the regular rate; an employee who works for more than two hours shall be paid at the regular rate plus at least one-and-two-thirds (1⅔) times the regular rate. An employee who works up to four hours’ overtime on a rest day shall be paid for four hours’ work; an employee who works between four and eight hours shall be paid for eight hours’ work; and an employee who works between eight and 12 hours shall be paid for 12 hours’ work.
  (2) Hours worked on a rest day will count toward the monthly maximum of 46 hours of overtime, and are subject to the maximum permitted working hours of 12 hours per day. However, hours worked due to natural disaster, accident or emergency do not count toward the 46-hour monthly overtime limit.

3. Regulation of national holidays reverts to the Ministry of the Interior: From 1 January 2017, national public holidays on which workers are entitled to a day off work will be prescribed by the Ministry of the Interior’s Implementation Regulations on Memorial and Festival Days (紀念日及節日實施辦法), which currently provides for 12 national holidays, including Labor Day on 1 May.

4. Increased entitlements to paid annual leave, effective from 1 January 2017:
  (1) The amendments introduce a new entitlement for annual leave for workers in continuous service with the same employer for more than six months but less than one year, and increase the entitlements for employees with longer periods of service, as follows: six months to one year, three days; one to two years, seven days (unchanged); two to three years, increased from seven days to 10 days; three to five years, increased from 10 days to 14 days; five to 10 years, increased from 14 days to 15 days. Employees with more than 10 years’ service are still entitled to one additional day of annual leave for each additional year of service, up to a maximum of 30 days’ annual leave.
  (2) The amended Act expressly provides that in principle, workers may decide for themselves when to take their annual leave. An employer may negotiate adjustments with its workers to meet urgent operational needs. This replaces the previous provision that the timing of annual leave should be decided through consultation between employer and employees.
  (3) The employer has a duty to inform employees that they are entitled by law to take annual leave.
  (4) Employees must be paid for all annual leave not taken: In the past, if employees failed to use up all of their annual leave entitlement, for reasons that were not the fault of the employer, then the employer could decline to pay out wages in lieu of leave for the days not taken. Following the latest amendments to the Act, at year’s end or on termination of employment, payment in lieu must be given for all days of annual leave not taken, regardless of the reason.
  (5) An employer must register in its payroll records the number of annual leave days taken and the amount of wages paid in lieu of leave, and must give written notice of this information to employees at regular intervals.

5. When paying out wages to an employee, an employer must inform the employee of the method of calculation for each item of wages paid.

6. For shift workers, the rest period between shifts must be at least 11 hours. The date for this provision to be implemented will be set by the Executive Yuan.

7. Increased protection for whistleblowers: An employer may not dismiss, demote, reassign, reduce the pay of, or take other unfavorable action against an employee who files a complaint against the employer as permitted under the Act; any such unfavorable action shall have no legal effect. On receiving a complaint, the competent authority or inspection agency must inform the worker of its handling of the complaint in writing within 60 days, and must keep the identity of the complainant strictly confidential.

8. Increased penalties: The maximum administrative fine for violations of the provisions on wages and working hours is increased to NT$1 million. Additionally, to strengthen employers’ liability, under a new provision the competent authority may increase such a fine by up to one half of the statutory maximum penalty, according to the scale of the enterprise, the number of persons involved in the violation, and/or the severity of the violation.