Following the negotiations and discussions in the past few months, the Legislative Yuan finally passed a set of amendments to the Labor Standards Act (“LSA”) on December 6, 2016. The new amendments are important to both employers and employees. The key points of the amendments are:
- Employees are now entitled to two days off every week Under the old law, employees were to be given one day off every seven days. The amendments stipulate that employees are entitled to two days off every seven days, including one “mandatory day off” and one “flexible rest day”. On the mandatory day off, an employer may request an employee to work only when a natural disaster, accident or emergency occurs and the employer thinks there is a need to continue carrying on the employee’s work. The employee will receive double pay and is entitled to a day offto compensate for working on the mandatory day off. On the flexible rest day, an employer may request an employee to work on that day after obtaining his/her consent. If the employee works on the flexible rest day, for the first 2 hours of work, the employee is entitled to receive additional wages equal to at least one and one-third times the employee’s hourly wage. For work beyond 2 hours, the employee is entitled to receive additional wages equal to one and two-thirds times the employee’s hourly wage. If the total working hours on that day do not exceed 4 hours, the employee is still entitled to receive overtime pay for 4 hours. If the total hours worked exceed 4 hours but are less than 8 hours, the employee is entitled to receive overtime pay for 8 hours. If the total hours worked exceed 8 hours and are less than 12 hours, the employee is entitled to receive overtime pay for 12 hours.
- Reduction of public holidays available to employees Under the amendments, the number of public holidays available to employees is reduced to 12 days, according to the “Regulations Governing Memorial Days and Holidays” issued by the Ministry of the Interior.
- Adjustment on the accruement of annual paid leave New employees are granted more days off for annual leave. The amendments stipulate that new employees will qualify for 3 days of annual leave after working for the employer for six months in the first year of employment, increasing to 7 days after working for more than one year but less than two years, to 10 days after more than two years but less than three years, and to 14 days after three years but less than five years. After working for fives years but less than ten years, the employee is entitled to have 15 days of annual leave. After working for ten years, the employee is entitled to have one additional day of annual leave for each year of employment beyond ten years, subject to a cap of 30 days of annual leave per year. In addition, the amendments stipulate that employees are entitled to decide when to take annual leave. However, if the employer has an urgent business need or if the employee has particular personal reasons, the parties may negotiate to adjust the dates for taking the annual leave.
- Employers shall maintain detailed records relating to the wages paid The amendments require that an employer shall maintain the detailed records relating to the wages paid, consisting of information on the paid wages, details of the calculation of wages, total amount of the wages, annual leave and wages payable for unused annual leave. Moreover, employers shall provide employees with such information annually in writing.
- Employers are subject to higher fines If an employer fails to comply with the requirements relating to working hours, salary payment and other requirements, the applicable fine has been raised to NTD1 million. In addition, depending on the scale or size of the employer, the number of employees impacted by the violation or the severity of the violation, the labor authority may impose additional fines of up to 50% of the maximum limit.
The new amendments will come into force from January 2017. Employers should review their work rules, maintain records relating to wages and pay particular attention to the wages payable for additional working hours in compliance with the new law.