Dear Friends,

Please be advised that the Taiwan Legislative Yuan passed a significant amendment to the Labor Stander Act ("Amendment") on December 12, 2016 (as attached).  We summarize the amendment below:

1.The Amendment requires that the employer shall provide the employee with details of the calculation of each wage item and include the same in the employees wage record and book.  (Article 23)

2.The regular day-off and recess day are adjusted as below (in practice, regular day-off refers to Sunday and recess day to Saturday):

(1)The Amendment specifically requires that each employee is entitled to two (1) days off in every seven (7) days, among which one (1) is regular day-off and the other is recess day.  (Paragraph 1, Article 36)

(2)The restriction in (1) is exempt upon any of the following circumstance:  (Paragraph 2, Article 36)

a.If the regular work hours of the employee are unevenly distributed within two (2)-week period according to Paragraph 2 of Article 30, the employee is entitled to at least one (1) regular day-off in every seven (7) days, and the total number of regular days off and recess days shall at least be four (4) days in every two (2) weeks.

b.If the regular work hours of the employee are unevenly distributed within eight (8)-week period according to Paragraph 3 of Article 30, the employee is entitled to at least one (1) regular day-off in every seven (7) days, and the total number of regular days off and recess days shall at least be sixteen (16) days in every eight (8) weeks.

c.If the regular work hours of the employee are unevenly distributed according to Article 30-1, the employee is entitled to at least two (2) regular day off in every two (2) weeks, and the total number of regular days off and recess days shall at least be eight (8) days in every four (4) weeks.

3.The wage on recess days (referring to Saturday in practice) shall be calculated as follows: (Article 24)

(1)Overtime charge – The overtime charge for the recess day shall be 1.33 x regular hourly rate for the first two (2) hours, and 1.66 x regular hourly rate after the two (2) hours.

(2)Overtime hours – The overtime working hours shall be deemed: (i) four (4) hours for the actual hours below four (4), (ii) eight (8) hours for the actual hours between four (4) to eight (8), and (iii) twelve (12) hours for the actual hours between eight (8) to twelve (12). 

4.The overtime hours will be counted into the ceiling of the weekly 46 overtime hours.  (Paragraph 3, Article 36)

5.National holidays shall refer to those set forth by the Ministry of Interior and as such the seven (7) holidays (i.e. the next day of New Year's Day (January 2), Youth Day (March 29), Confucius' Birthday (September 28), Taiwan Retroration Day (October 25), Birthday of President Chiang Kai-shek (October 31), Dr. Sun Yat-sen's Birthday (November 12) and Constitution Day (December 25)) under the law before the Amendment will be removed and forfeited as of January 1, 2017.  (Article 37)

6.The annual leave is further amendment as follows, depending on the seniority of the employees (to be effective on January 1, 2017):  (Paragraph 1, Article 38)

(1)Between six (6) month (included) to one (1) year (excluded): Three (3) days (new)

(2)Between one (1) year (included) to two (2) years (excluded): Seven (7) days

(3)Between two (2) (included) to three (3) years (excluded): Ten (10) days (increased from seven (7) days)

(4)Between three (3) (included) to five (5) years (excluded): Fourteen (14) days (increased from ten (10) days) 

(5)Between five (5) (included) to ten (10) years (excluded): Fifteen (15) days (increased from fourteen (14) days)

(6)Ten (10) years or more: top up one (1) day for each year, up to thirty (30) days.

7.Annual leave schedule shall be decided by the employees, with certain exceptions subject to the agreement between both employee and employer, as of January 1, 2017.  (Paragraph 2, Article 38)

8.The employees wage records and book shall specify the number of the annual leave that the employee is entitled to and the payment for the days of leave that have not been used, for which the employee shall be informed on annual basis (to be effective on January 1, 2017).  (Paragraph 5, Article 38)

9.There shall be at least eleven (11) hours between the shifts for the shift working hours arrangement.  (Article 34)

10.The Amendment introduces a whistle-blower clause, under which an employee may report the incompliance by the employer of the labor law to the regulator and the employer shall not thus discriminate the employee.  The regulator is also required to keep confidential the information of the reporting employee.  (Article 74)

11.The highest penalty under the Amendment is increased from NT$300,000 (approximately US$10,000) to NT$1 million (approximately US$33,333) for breach of most articles of the Labor Standard Act.   The penalty may be further increased by 1/2 to NT$1.5 million (approximately US$50,000) depending on the business scale, employees so impacted and materiality of the breach.  (Article 79)

Echo Yeh/ Mark Chen/ Naiju Kuan