Regulating the Workplace

After much controversy, a revised Labor Standards Law has now been enacted in Taiwan.

Company HR representatives cite an urgent need for greater flexibility.

When Deputy Labor Minister Liau Huei-Fang accepted an invitation from AmCham Taipei’s Human Resources Committee to exchange views with Committee members about recently implemented amendments to the Labor Standards Law (LSL), more than 100 HR specialists showed up for the meeting on April 19. The record attendance for an HR Committee event reflected the broad concern across foreign-invested and domestic industry in Taiwan about the ramifications of the new amendments, which include provisions covering working time, rest days, public holidays, annual leave, and overtime compensation.

The bill was passed by the Legislative Yuan on December 6 last year and promulgated by the President on December 23, with some articles going into effect on that date and some on January 1, 2017 – in either case providing employers with barely any time to adjust their personnel policies and systems. The key feature of the revisions was to establish a five-day workweek, with one mandatory rest day per week and one flexible day-off on which employees may agree to work overtime – with increased rates in effect when workers put in four hours or more of  overtime.

While stressing their commitment to a proper work-life balance for employees, attendees at the meeting stressed to the Deputy Minister that the rigid personnel practices mandated by the law may be appropriate for traditional manufacturing operations, but are detrimental in the modern performance-based workplace – especially when Taiwan is seeking to promote an innovative, knowledge-based economy. Professional and technical personnel tend to resent the paternalistic constraints imposed on their working time, such as the need to keep and file attendance records.

Among the suggestions raised at the meeting by HR representatives were:

  • Exempting high-level personnel whose salaries are above a stipulated amount (for example, more than three times the industry average) from the relevant provisions of the LSL amendments.
  • Giving employers more staffing flexibility by allowing the option of a four-week period (instead of a single week) for calculating work and rest days.
  • So as to avoid undeserved reputational damage, publishing the names of companies – and the chief executives of those companies – found to be in violation of the LSL only after violations have been confirmed, not when the inspectors first file their reports. It was also suggested that the names of first-time offenders not be made public unless they fail to correct their deficiencies in a reasonable amount of time.
  • Specifiying in the later enforcement rules that the burden of proof that authorized overtime work has in fact been carried out should rest with the employee.
  • Providing a 30-day buffer at the end of the one-year period for employees to utilize any unused leave time, whether by opting for cash or days off.
  • Ensuring that labor inspectors, many of whom are newly hired, are properly trained so as to minimize inconsistent interpretations of the rules from one inspector to another.

Deputy Minister Liau gave assurances that the inspectors are receiving rigorous training before enforcement of the new rules begins. She thanked the attendees for their comments, some of which she said the Ministry would consider, but noted that there is no current plan to further amend the law to relax any of its provisions.

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