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For businesses willing to expand in the Asia-Pacific region, Taiwan presents a compelling opportunity. Officially known as the Republic of China, this well-developed island nation boasts not only a strategic location but also a highly skilled workforce.
However, a proactive understanding of the employment laws in Taiwan is necessary to hire the right talent. You may take note of the Labor Standard Act to negotiate suitable workplace rights in Taiwan, like working hours and mandatory leave, social security and pay obligations, and employee privacy rights.
Let’s decode it for you in the following section.
Contractual Agreements
Instead of classifying workers as "blue collar" or "white collar," the labor law in Taiwan focuses on the type of employment agreement between you and the employee.
Types of employment contracts in Taiwan
Obligations and rights for both parties
- You must adhere to work hours and rest regulations that indirectly promote the health and safety of employees.
- If you have 30 or more employees, Taiwan labor law requires you to display work rules publicly.
- Moreover, the labor law in Taiwan requires you to extend the same employment terms and forms of employment agreements to full-time employees and part-time employees.
Further, the Personal Data Protection Act applies to contractual relationships under the Taiwan labor law. You may consider signing a Data Protection Agreement alongside an employment agreement to safeguard yourself from violating employee data privacy.
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Talk to an expertWorking Hours and Overtime
The Labor Standard Act prescribes normal working hours and eligibility for overtime pay as follows:
Regular working hours
- You may not extend regular working hours beyond eight hours a day or 40 hours a week.
- The labor law in Taiwan allows you to flexibly adjust (within one hour range) the time of commencement or end of work at the employee's request.
- You cannot compel female employees to work between 10 PM and 6 AM unless you meet safety provisions in the Work Rules.
Overtime regulations and compensation
- The employment laws in Taiwan allow overtime work up to four hours a day.
- Further, you cannot have total extended work hours beyond 46 hours a month.
- However, with prior consent from labor unions or labor-management conferences, you can increase overtime work to 54 hours a month and 138 hours over three months.
- If you are employing 30 or more employees, the labor laws of Taiwan require you to report work hour extensions to the local competent authority.
Taiwan labor law also prescribes overtime wage compensation as follows:
Minimum Wage and Compensation
The employment laws in Taiwan prescribe the following standards for employee compensation:
The minimum wage rate in 2024
- The monthly minimum wage in Taiwan is NT$27,470 (approx. US$929).
- Whereas, the hourly minimum wage in Taiwan is NT$183 (approx. US$6.20).
Factors affecting wage determination
Minimum wages are subject to periodic adjustments. These are just the basic requirements, and you may vary individual compensation packages based on factors such as experience, qualifications, job type, and industry.
Moreover, you may calculate employees’ wages by hour, day, month, or case. Learn more about effective ways to pay your remote employees.
Employee Benefits and Social Security
Here’s an overview of statutory employee benefits under the employment laws in Taiwan:
Statutory benefits
- You must offer paid leave on Memorial days and holidays on Labor Day and other days designated by the Ministry of the Interior.
- You must enroll employees with labor insurance, employment insurance, labor occupational accident insurance, and national health insurance benefits.
- The labor laws of Taiwan extend at least two days of paid rest per week.
Additional perks and benefits
- You must reimburse unused days of annual leave as wage compensation. You may calculate it based on the employee’s wages for normal work hours in the last month before the end of the year.
- You must ensure full pay during maternity leave. However, you may pay half the usual salary for employees who completed less than six months of service before availing of maternity leave.
Social security contributions and requirements
You must withhold and deduct tax payable and mandatory social security contributions at the prescribed rate of employee salary.
Vacations and Paid Time Off
You may support employees with the following statutory paid and unpaid leave benefits in Taiwan:
Annual leave entitlement
Public holidays and special leaves
- According to the Ministry of the Interior (MOI), you must observe the following public holidays in 2024:
Termination and Severance
The employment laws in Taiwan protect employees from arbitrary termination of employment contracts and enforce notice periods and severance pay in certain conditions. Here’s a quick breakdown:
Grounds for termination
Notice period and severance pay
Discrimination and Equal Opportunity
The anti-discrimination provisions in the employment laws in Taiwan provide for:
Prohibitions against workplace discrimination
- You cannot discriminate against any employee based on their race, gender, age, disability, etc. The protected groups extend beyond Taiwanese citizens.
- Taiwan labor law specifically prohibits discrimination based on gender or sexual orientation. Further, the burden of proof is on you if accused of such discrimination at the workplace.
You can partner with a suitable Employer-Of-Record (EOR) solution that can protect you from liabilities arising due to non-compliance.
Health and Safety Regulations
The labor law in Taiwan related to health and safety regulations stipulates the following measures:
- You and your contractors share liability for safety violations.
- All major accidents at the workplace must be reported to local authorities within 8 hours.
- Further, you must take steps to prevent stress-related injuries and ailments.
- If you employ more than 50+ staff, you must have a contracted medical staff for health services.
- Larger companies with 300+ employees must implement anti-overwork measures, provide medical checkups, and keep records.
- Fines for non-compliance may range between NT$30,000 - NT$300,000.
Stay Compliant with Skuad
Think of Skuad as your global HR partner.
We can handle the complexities of onboarding new employees, payroll, taxes, and legal compliance in over 160 countries, including Taiwan.
While you focus on attracting top talent and scaling your business, we act as your local Employer-Of-Record (EOR) in Taiwan. You also need not worry about setting up local entities or navigating intricate legal nuances!
Skuad ensures all statutory benefits and employer obligations per the employment laws in Taiwan are passed on effectively.
The time is right to book a demo with Skuad and simplify your journey to build an international team!
FAQs
Q1. What are the labor laws in Taiwan?
A1. Labor Standards Act (LSA) is the key legislation for labor law in Taiwan. This act covers areas like minimum wages, working hours, statutory leave, termination, and health & safety. You draft employment contracts based on the recommendations of LSA.
Q2. What is the termination law in Taiwan?
A2. Taiwan labor law allows you to unilaterally terminate employees upon written notice. You may choose to pay lumpsum instead of serving a notice period. Severance pay may also be required.
Q3. What are the payroll rules in Taiwan?
A3. The payroll rules in Taiwan require you to set salaries or wages over and above the minimum requirement of NT$27,470 per month or NT$168 per hour. Further, you must withhold taxes, deduct social security contributions, and pay the relevant authorities.
Q4. What is the minimum period of termination?
A4. The minimum period of termination is determined by the mandatory notice period. Such periods depend on the length of service and may range between 10 days to 30 days.
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