Practice Area Articles
Taiwan
January 28, 2025
Victor Chang and Tiffany Wu
Back to International Employment Law
KEY DEVELOPMENTS FOR 2025
Increased Employer Penalties for Workplace Accidents
A draft amendment to the existing Occupational Safety and Health Act (OSHA) was announced on 7 November 2024, and is expected to be submitted to the Legislative Yuan for review shortly. Some key changes under the amendment include:
- For fatalities caused by the employer's failure to prevent injuries related to hazardous machinery, equipment or work environment, the maximum imprisonment will be increased from three years to five years, and fines will rise from NT$300,000 to NT$1.5 million.
- For accidents involving three or more injured persons related to hazardous machinery, equipment or work environment, imprisonment will increase from one year to three years, and fines will rise from NT$180,000 to NT$1 million.
In anticipation of this amendment coming into effect when approved, employers can undertake the following steps as a precaution and measure of good practice:
- Conduct comprehensive risk assessments
Perform thorough risk analyses of the work environment, construction sites, machinery and equipment to identify potential hazards.
- Ensure legal compliance and internal policies
Strictly adhere to all legal safety requirements, provide necessary safety and health equipment and establish detailed internal policies, such as standard operating procedures, to address these obligations effectively.
- Enhance safety measures for hazardous equipment
Prioritize and improve safety protocols for operating and maintaining hazardous machinery and equipment to prevent accidents.
- Implement regular safety training
Conduct ongoing safety training programs to increase employee awareness, ensure compliance with safety regulations and reduce the risk of occupational accidents.
Upcoming Amendments on Workplace Bullying Regulations
At present, the OSHA requires employers to protect employees from physical or mental harm caused by others during work but lacks a clear definition of workplace bullying. This gap makes it difficult to hold employers accountable even if they fail to take action. In response to a recent high-profile workplace bullying case involving the staff of the Ministry of Labor (the MOL), the MOL has proposed amendments to the OSHA regarding workplace bullying. These amendments are expected to be submitted to the Legislative Yuan for review in the upcoming legislative session. Some key changes in the proposed amendments include:
- Elevating employer responsibilities
Upgrading the existing employer obligations outlined in the MOL guidelines to a statutory level by incorporating them into OSHA. These responsibilities include identifying and assessing workplace hazards related to unlawful conduct, establishing complaint channels, conducting fair investigations and implementing necessary workforce adjustments.
- Immediate penalties for violations
Once the guidelines are codified into law, violations discovered during labour inspections will be subject to immediate penalties, eliminating any grace period for corrective actions.
- Increased maximum fines
Raise the maximum fine for violations from NT$150,000 to NT$750,000.
In preparation, employers can:
- Establish a comprehensive policy that defines workplace bullying and outlines preventive measures to foster a respectful work environment.
- Create multiple confidential reporting systems to encourage employees to report inappropriate behaviour without fear of retaliation.
- Develop systematic procedures to record, investigate and address complaints related to workplace bullying, ensuring a fair and transparent process.
- Engage professional legal advisors or labour law experts to review and update internal policies, ensuring they align with the current regulations.
Greater Unpaid Wage Protections in Liquidation and Bankruptcy Situations
Under the Labor Standards Act, only unpaid wages from the six months prior to an employer's closure, liquidation or bankruptcy are protected. These wages are treated as having the same priority as creditor claims secured by mortgage rights, pledges or liens, and employees are paid according to the proportion of their claims. However, the proposed amendment announced on 31 July 2024, expands this protection to encompass unpaid wages accrued within the five years preceding an employer's closure, liquidation or bankruptcy, capped at an amount equivalent to six months of the employee's monthly insured wage (as reported for labour insurance purposes).
Should this amendment gain approval by the Legislative Yuan, prior to any future decisions regarding the closure, liquidation or bankruptcy of the company, employers should consult with professional legal advisors or labour law experts to fully understand the calculation of protected wages and related obligations and ensure that the protected employee wages are thoroughly accounted for in the financial assessment.
KEY DEVELOPMENTS FOR 2023
Employment Policies in Relation to COVID-19
According to an announcement of the Ministry of Labor, an employer cannot require its employees to take COVID vaccinations, provide negative PCR test reports, etc. except for in a limited number of industries on which the Taiwan Centers for Disease Control has imposed relevant requirements (such as nursing homes and kindergartens). Moreover, refusing to get a COVID vaccination cannot constitute a statutory reason to terminate employment in Taiwan, and thus an employer is also not permitted to terminate an employee or impose any penalty because its employee has refused to be vaccinated for COVID or take PCR tests.
In addition, the Ministry of Labor has issued several letters stating that, if an employee is diagnosed with COVID and asks for sick leave, the employer should not refuse to pay full-attendance bonus to such employee.
Beginning from 1 December 2021, employers are also required to purchase COVID medical insurance for incoming foreign blue-collar workers (i.e., migrant workers) before they enter Taiwan, or such workers would be banned from entry. The employers are required to pay the full cost of the insurance premiums.
Lastly, Taiwan’s epidemic prevention and isolation requirements have been gradually eased. The entry quarantine and the cap on the number of people entering Taiwan was cancelled respectively on 13 October 2022, and 10 December 2022. Starting from 14 November 2022, patients are required to stay in quarantine for a reduced duration of five days only.
Labor Occupational Accident Insurance and Protection Act (the “LOAIPA”) Has Taken Effect on 1 May 2022
Originally, according to Labor Insurance Act, only employees employed by a company or firm with more than five employees should enroll in the government’s labor insurance, resulting in many employees being outside the protection of labor insurance in the event of occupational accidents.
To resolve this issue, LOAIPA was promulgated and has taken effect on 1 May 2022. According to LOAIPA, regardless of the number of employees, all employers shall insure their employees aged 15 or more under labor occupational accident insurance and pay the insurance premium in full. At present, the average insurance premium rate is 0.20% of the monthly insured wages of an employee.
It should be noted that if an employer fails to purchase labor occupational accident insurance for its employees, it will face a fine of NT$20,000~100,000 and may be fined for each such violation found. The competent authority will also publish the name and the name of the representative of such employer.
The Relationship Between a Food Delivery Platform and Its Deliver Staff Has Been Determined by the Court to be a Labor Contract. The Delivery Drivers/Riders is Deemed as a Laborer Under the Labor Standards Act.
According to Taipei High Administrative Court 2020 Su Tzu No. 1046 Judgement, the contract between Uber Eats and its delivery drivers/riders is an “employment relationship” for reasons set out below. Uber Eats, therefore, should abide by Taiwan’s labor laws and relevant regulations.
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The contract mainly asks for provision of labor services from delivery drivers/riders, and Uber Eats requires them to deliver food in person.
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A personal subordination relationship exists between Uber Eats and delivery drivers/riders.
A delivery driver/rider must follow detailed specifications of Uber Eats and cannot make independent decisions on how their services should be performed. Uber Eats also has right to suspend accounts and deduct rewards of their delivery drivers/riders, as a punishment, if multiple wrong delivery records are found. All these indicate that Uber Eats has power to impose disciplinary actions against the delivery drivers/riders.
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An economic subordination relationship exists between Uber Eats and delivery drivers/riders. The salary of a delivery driver/rider depends on each food delivery service he or she provides. The calculation standard and payment amount, however, are determined by Uber Eats, who is the one bearing the relevant financial risks.
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An organizational subordination relationship exists between Uber Eats and delivery drivers/riders.
In couriering food, the delivery driver/rider represents the Uber Eats brand only instead of his or her own character, and must work with other Uber Eats personnel to complete the delivery work.
As the so called “gig” economy is emerging and growing rapidly, delivery platforms and other similar sharing platforms with the above-mentioned characteristics should pay attention to the relevant regulations and requirements of Taiwan’s labor legislation to avoid breaching the law.
KEY DEVELOPMENTS FOR 2020
Principal Drivers for Legal and Business Activity
There are two principal drivers for legal and business activity in Taiwan in 2020. The first is the continuing U.S. China 'cold trade war', which has been observed since 2018 and continues to expand. The cold trade war has benefitted Taiwan due to the country's place in global supply chains, which has meant that both U.S. and Chinese companies are seeking out Taiwan partners to do business. The second driver is the COVID-19 pandemic. Taiwan successfully contained COVID-19's initial outbreak without the need to lock down its schools and businesses. Taiwan's GDP grew by 1.54% in the first quarter of 2020 and is expected to continue to experience more growth. Overall, Taiwan's unemployment rates have remained stable and Taiwan's current stimulus package is modest (in comparison to the rest of the world), accounting for only 5.4% of GDP.
Outbound Investments
As Taiwan companies, venture capital funds, and private equity funds have reduced their domestic portfolios, outbound investments into Japan, Europe and the United States have recently picked up. Commercial banks in Taiwan are also increasingly willing to lend to Taiwanese companies and funds investing outside of Taiwan. The Taiwan National Development Fund (the main Taiwan sovereign fund investing in alternative assets) has also shown much more flexibility and willingness to co-invest in large projects that are led by Taiwanese public companies.
Relative Political Stability and Anti-PRC Sentiment
Recent world events, including the COVID-19 pandemic, have enabled the pro-independence, pan-Green coalition to consolidate power with greater support from Taiwanese voters. As a result, there is greater scrutiny of Chinese acquisitions of Taiwanese companies. With fewer deep-pocketed Chinese companies able to purchase companies in Taiwan, this creates opportunities for Japanese, U.S. and European companies to invest at a potentially cheaper cost and access cheap Taiwan credit markets.
KEY DEVELOPMENTS FOR 2019
Changes to Labour Dispute Resolution
The Labour Procedure Act (“LPA”) was approved on 9 November 2018, and is expected to take effect in 2019. The LPA establishes a general principle that mediation proceedings shall be concluded in three oral-argument sessions within three months, and litigation proceedings shall be concluded in one oral-argument session within six months in the court of first instance.
Other key features of the LPA include:
- a specialised tribunal or unit in every Court to handle labour disputes, with experienced Labour judges and mediators;
- disputes arising from cooperative education are covered under the LPA;
- enhancing access to justice for employees by removing some of the barriers to justice (e.g. providing the employees with broader choices of venue for dispute resolution with respect to labour matters) and providing them with the right to appear with an assistant during a court session; and
- a cap on security for costs payment at no more than one-tenth of the amount of the claim. However if the employee can show such payment would seriously affect his or her livelihood, the court may discharge this requirement.
Expansion of Online Services for Parental Leave Applicants
Since 12 November 2018, applicants for parental leave allowances are able to submit documents online. Applicants can also apply through their employer if their employer is registered with the online service of the Bureau of Labour Insurance of Taiwan (“BOLI”). This was previously excluded due to the requirements that certain documents were required to be certified and submitted in paper form, which led to a number of complaints.
Resident Doctors Under the Protection of Labor Standards Act
Ministry of Labor, Republic of China, announced on 30 November 2018 that the Labor Standards Act will apply to all resident doctors from 1 September 2019. Resident doctors will enjoy the protection of compensation for occupational injury and retirement pension.
However, given the specialty and professionalism of the work performed by resident doctors, their relevant working hours and holidays may still be agreed with the hospitals. The application will not apply to visiting staff (attending physicians) with greater autonomy or resident doctors in public hospitals.
KEY DEVELOPMENTS FOR 2018
Further Amendments to Taiwan’s Labour Standards Act
An amendment to the Taiwan’s Labor Standards Act (the “Prior Law”) will come into effect on March 1, 2018 (the “Amendment”). The key points of the Amendment are as follows:
Change in Calculation of Wages for Working on a Rest Day
Under the Prior Law, when calculating overtime wages for working on a rest day, work for 4 hours or less was counted as 4 hours, and work between 4 to 8 hours was counted as 8 hours. The Amendment has amended this provision so that the overtime wage for working on a rest day shall be based on the worker’s actual working hours.
Increase in Maximum Permitted Overtime
Under the Prior Law, the maximum overtime for a worker was no more than 46 hours per month. Under the Amendment, the maximum overtime for a worker has been increased to 54 hours with the consent of a labor union or with the approval of the labor-management conference, provided that the total overtime shall not exceed 138 hours for a period of three months. Under such circumstances, the employer may elect, with such worker’s consent, to provide such worker with wages or compensatory time off for the overtime.
In addition, the Supreme Administrative Court recently clarified the concept of “overtime” and ruled that any worker who works on non-working time or on a rest day shall be regarded as working overtime.
Decrease in Minimum Rest Period for Working Shifts
Under the Prior Law, a worker was entitled to have at least 2 days off for every 7 days worked, provided that the 2 days off were divided into 1 regular day off and 1 recess day. The Amendment has changed the relevant provisions and now provides that an employer in specific industries may be entitled to adjust the regular day off and recess day during such 7-day-cycle with the consent of the competent authority in charge of the relevant enterprise. Employer may provide an 8-hour rest period as opposed to 11 under previous legislation with the consent of a labor union or with the approval of the labor-management conference.
Unused Annual Paid Leave May be Postponed for 1 Year
Unused annual paid leave may now be postponed until the end of the following year, and such annual paid leave shall not be paid out as wages unless the worker does not use the leave in the following year.
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