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Employment Laws In Taiwan

Updated on:
16 Jan, 2024
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Building a remote team?

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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

  • The employment laws in Taiwan recognize two main types of employment contracts:
    • Indefinite Term Contracts: Designed for ongoing, continuous work.
    • Fixed-Term Contracts: Used for temporary, short-term, seasonal, or specific work projects.
  • Additionally, most contracts don't require written form, exceptions exist:
    • Specific roles: Supervisory/administrative staff, professionals with special responsibilities, and workers with flexible work arrangements (hours/leave) need written agreements
    • Non-compete clauses: Any post-employment non-compete agreement must be in writing.
    • Foreign workers: Contracts for specific work categories must be written for foreign workers.

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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Working 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:

Duration Additional Pay
Up to two hours 1/3 or more of the regular hourly rate
Three to four hours 2/3 or more of the regular hourly rate
Public holidays/annual leave, natural disasters, emergencies Double the regular hourly rate

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.

Social Scheme Employer Contribution (%) Employee Contribution (%) Cap (NT$)
Labor Insurance Program (LIP) 7 2 (remaining 1.2 by government) 45,800
National Health Insurance Program (NHIP 3.1 1.55 (remaining 0.517 by the government) + Each dependent adds 1.58 units to the premium 150,000
Labor Pension Program (LPP) 6 0 150,000

Vacations and Paid Time Off

You may support employees with the following statutory paid and unpaid leave benefits in Taiwan: 

Annual leave entitlement

  • The employment laws in Taiwan grant paid annual leave based on years of service:
    • Six months to one year of employment: Offer three days paid off
    • One to two years: Give a seven-day break with no loss in earnings
    • Two to three years: Extend 10 paid days to unwind
    • Three to five years: 14 days of paid leave
    • Five to ten years: 15 days of paid leave.
    • More than 10 years: Grant an extra day off for each year, up to 30 days

Public holidays and special leaves

  • According to the Ministry of the Interior (MOI), you must observe the following public holidays in 2024:
Name of the Holiday Date of Holiday
Foundation Day of the Republic of China January 1
Lunar New Year's Eve Anywhere between mid-January and mid-February
Lunar New Year First three days of the lunar calendar
Peace Memorial Day February 28
Children's Day A day before Tomb Sweeping Day
Tomb Sweeping Day Ching Ming Festival, April 5
Labor Day May 1
Dragon-Boat Festival 5th day of the 5th month of the lunar calendar (between late May and early June)
Mid-Autumn Festival 15th day of the 8th month of the lunar calendar (between mid-September and early October)
National Day October 10
  • Further, Taiwan labor law requires you to compensate for public holidays falling on a weekend with a day off at another time.
  • Additionally, the employment laws in Taiwan require you to support employees with the following special leave:
    • Maternity leave: You must offer eight weeks of paid maternity leave for female employees expecting childbirth.
    • Miscarriage leave: In case of a miscarriage, you may provide paid leave anywhere between five days to four weeks.
    • Paternity leave: Employees get five days of paternity leave in Taiwan.
    • Sick leave: You must grant the following number of days of sick leave per year:
      • For illness not requiring hospitalization: 30 days, paid at 50% of the normal salary
      • For illness requiring hospitalization: Up to one year over two years.
      • You may combine leave for recuperation after pregnancy as sick leave requiring hospitalization.
    • Further, you may provide for additional leave during the medical treatment and recovery in case of occupational accidents.

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

  • You may terminate employment after a notice period under the following conditions:
    • Suspension, transfer, or contraction due to losses or force majeure.
    • When employees consistently fail to meet your performance expectations.
  • You must inform the local competent authority before mass redundancy or layoffs.
  • However, you may immediately terminate employment under the following circumstances:
    • Major violations of employment agreement or company policies by the employee.
    • Deliberate harm to equipment, materials, or confidential information.
    • Absence from work for three consecutive days or a total of six days in a month without justification.
    • Convicted employee or discovery of false information provided during the interview.

Notice period and severance pay

  • You may extend notice periods based on years of employment service:
    • Three months to one year of service: 10 days' notice
    • One year to three years: 20 days' notice
    • More than three years: 30 days' notice
  • You must give an advance notice 30 days before terminating any fixed-term contract lasting over three years.
  • However, you may offer a wage payment in place of the notice period.
  • Further, all employee-initiated termination attract a 30-day advance notice.
  • Additionally, you must initiate severance pay within 30 days of termination as follows:
    • Labor Standards Act Method: You may offer one month's average wage for each full year of service, prorated for partial years. Short service of less than one month counts as one month.
    • Labor Pension Act Method: You may offer half a month's average wage for each full year of service, prorated for partial years. However, the maximum payout is capped at six months' salary.

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.

limited-offer-banner
EOR in 
Taiwan
Monthly
best value
Annually
Pay monthly at a discounted rate with a 12-month commitment
$
399
/month
(billed annually)
G2 badge

Employ contractors and employees in 160+ countries

G2 badge
limited-offer-banner
EOR in 
Taiwan
Monthly
$
449
/month
(billed annually)
Annually
Pay monthly at a discounted rate with a 12-month commitment
$
399
/month
(billed monthly)
G2 badge

Employ contractors and employees in 160+ countries

G2 badge

Table of Content

Building a remote team?

Employ exceptional talent, anywhere, anytime!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Employment Laws In Taiwan

Employment Laws In Taiwan

Building a remote team?

Employ exceptional talent, anywhere, anytime!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

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

  • The employment laws in Taiwan recognize two main types of employment contracts:
    • Indefinite Term Contracts: Designed for ongoing, continuous work.
    • Fixed-Term Contracts: Used for temporary, short-term, seasonal, or specific work projects.
  • Additionally, most contracts don't require written form, exceptions exist:
    • Specific roles: Supervisory/administrative staff, professionals with special responsibilities, and workers with flexible work arrangements (hours/leave) need written agreements
    • Non-compete clauses: Any post-employment non-compete agreement must be in writing.
    • Foreign workers: Contracts for specific work categories must be written for foreign workers.

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. 

One platform to grow your global team

Hire and pay talent globally, the
hassle-free way

Talk to an expert

Working 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:

Duration Additional Pay
Up to two hours 1/3 or more of the regular hourly rate
Three to four hours 2/3 or more of the regular hourly rate
Public holidays/annual leave, natural disasters, emergencies Double the regular hourly rate

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.

Social Scheme Employer Contribution (%) Employee Contribution (%) Cap (NT$)
Labor Insurance Program (LIP) 7 2 (remaining 1.2 by government) 45,800
National Health Insurance Program (NHIP 3.1 1.55 (remaining 0.517 by the government) + Each dependent adds 1.58 units to the premium 150,000
Labor Pension Program (LPP) 6 0 150,000

Vacations and Paid Time Off

You may support employees with the following statutory paid and unpaid leave benefits in Taiwan: 

Annual leave entitlement

  • The employment laws in Taiwan grant paid annual leave based on years of service:
    • Six months to one year of employment: Offer three days paid off
    • One to two years: Give a seven-day break with no loss in earnings
    • Two to three years: Extend 10 paid days to unwind
    • Three to five years: 14 days of paid leave
    • Five to ten years: 15 days of paid leave.
    • More than 10 years: Grant an extra day off for each year, up to 30 days

Public holidays and special leaves

  • According to the Ministry of the Interior (MOI), you must observe the following public holidays in 2024:
Name of the Holiday Date of Holiday
Foundation Day of the Republic of China January 1
Lunar New Year's Eve Anywhere between mid-January and mid-February
Lunar New Year First three days of the lunar calendar
Peace Memorial Day February 28
Children's Day A day before Tomb Sweeping Day
Tomb Sweeping Day Ching Ming Festival, April 5
Labor Day May 1
Dragon-Boat Festival 5th day of the 5th month of the lunar calendar (between late May and early June)
Mid-Autumn Festival 15th day of the 8th month of the lunar calendar (between mid-September and early October)
National Day October 10
  • Further, Taiwan labor law requires you to compensate for public holidays falling on a weekend with a day off at another time.
  • Additionally, the employment laws in Taiwan require you to support employees with the following special leave:
    • Maternity leave: You must offer eight weeks of paid maternity leave for female employees expecting childbirth.
    • Miscarriage leave: In case of a miscarriage, you may provide paid leave anywhere between five days to four weeks.
    • Paternity leave: Employees get five days of paternity leave in Taiwan.
    • Sick leave: You must grant the following number of days of sick leave per year:
      • For illness not requiring hospitalization: 30 days, paid at 50% of the normal salary
      • For illness requiring hospitalization: Up to one year over two years.
      • You may combine leave for recuperation after pregnancy as sick leave requiring hospitalization.
    • Further, you may provide for additional leave during the medical treatment and recovery in case of occupational accidents.

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

  • You may terminate employment after a notice period under the following conditions:
    • Suspension, transfer, or contraction due to losses or force majeure.
    • When employees consistently fail to meet your performance expectations.
  • You must inform the local competent authority before mass redundancy or layoffs.
  • However, you may immediately terminate employment under the following circumstances:
    • Major violations of employment agreement or company policies by the employee.
    • Deliberate harm to equipment, materials, or confidential information.
    • Absence from work for three consecutive days or a total of six days in a month without justification.
    • Convicted employee or discovery of false information provided during the interview.

Notice period and severance pay

  • You may extend notice periods based on years of employment service:
    • Three months to one year of service: 10 days' notice
    • One year to three years: 20 days' notice
    • More than three years: 30 days' notice
  • You must give an advance notice 30 days before terminating any fixed-term contract lasting over three years.
  • However, you may offer a wage payment in place of the notice period.
  • Further, all employee-initiated termination attract a 30-day advance notice.
  • Additionally, you must initiate severance pay within 30 days of termination as follows:
    • Labor Standards Act Method: You may offer one month's average wage for each full year of service, prorated for partial years. Short service of less than one month counts as one month.
    • Labor Pension Act Method: You may offer half a month's average wage for each full year of service, prorated for partial years. However, the maximum payout is capped at six months' salary.

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.

Building a remote team?

Employ exceptional talent, anywhere, anytime!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Skuad is the best solution to hire and expand globally.

Skuad makes building globally distributed teams, quick and hassle-free.

Request demo
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