Five-day workweek, uniform national holidays for all

  • Date: 2016-10-26

I. Background

In an effort to implement a five-day workweek, Taiwan on January 1, 2016 cut statutory working hours from 84 hours every two weeks to 40 hours per week. Some companies, however, were able to spread the 40 hours over six days of the week rather than five by taking advantage of Article 36 the Labor Standards Act (LSA), which only required employers to give workers at least one day off every seven days. To guarantee workers two days off per week and make the number of national holidays the same for all, amendments to the LSA were passed by the Legislative Yuan on December 6, 2016.

 

II. Key amendments to the LSA

A. A worker shall have two days off in every seven days, with one fixed day off and one flexible day off. If an employee is required to work on the flexible rest day, the hours worked that day shall be counted in the total overtime hours worked that month.

B. Overtime wages for the flexible rest day shall be calculated as follows: In addition to the regular hourly wage, a worker shall be paid an additional one and one-third times the regular rate or more for the first two hours of overtime, and an additional one and two-third times the regular rate or more starting from the third hour of overtime. Any overtime up to four hours shall be counted as four hours, more than four to eight hours of overtime shall be counted as eight, and more than eight to 12 hours of overtime shall be counted as 12 hours.

C. The Ministry of the Interior has prescribed new guidelines to make national holidays uniform for all workers. Given the significance of Labor Day, May 1 has been designated as a day off under the LSA. The new guidelines will be implemented beginning on January 1, 2017.

D. The number of paid annual leave days shall be increased and the rights of all employees protected regardless of seniority. Other new regulations on annual leave that will come into force January 1, 2017 provide that:

  • In principle, an employee may choose when to take annual leave.
  • An employer shall remind the employee to schedule his annual leave.
  • Unused annual leave shall be converted into salary for the employee.
  • An employer shall record the dates of used annual leave and the payments for unused annual leave, and regularly inform the employee of such in writing.

E. Employees working shifts shall be entitled to at least 11 consecutive hours of rest in between shifts. The implementation date of this regulation shall be determined by the Executive Yuan.

F. Under a new whistleblower provision, the competent authority or inspection agencies that receive an employee complaint against his employer shall inform the employee in writing of the investigation results within 60 days, and keep the employee’s identity confidential.

G. The fine for employers who violate wage payment and working hour regulations has been increased to NT$1 million (around US$31,500). To make employers more accountable, a new provision allows the competent authority to impose an additional fine depending on the size of the business, the number of employees affected by the violation, and the severity of the offense; the additional fine shall not exceed one-half of the maximum statutory fine.

 

III. Complementary measures to balance labor rights and business needs

A. To balance labor and management needs, work on flexible rest days is permitted:

Under the old LSA, rest days were mandatory days off, and employers could not ask employees to work on those days except in special circumstances such as natural disasters, accidents or emergencies. Since a system that prohibited work on two mandatory rest days per week would leave little room for reasonable arrangements between labor and management, the amended LSA permits overtime work on the flexible rest day. This pragmatic and feasible approach ensures that workers can enjoy two days of rest per week, but also allows them to work overtime on the flexible rest day in case of financial need.

B. Measures to control overtime hours and enforce a five-day workweek:

The amended LSA raises overtime pay rates for flexible rest days, and requires employers to count hours worked on flexible rest days as part of the monthly total of overtime hours. By making overtime more expensive and setting a limit on total work hours, the LSA discourages employers from working their employees on flexible rest days and thus helps realize the goal of a five-day work week.  

C. Increase annual leave days and protect all workers’ right to annual leave:

Given that 50 percent of workers in the private sector have been at their current jobs for less than five years, the LSA was changed to protect the rights of all workers to paid annual leave, regardless of seniority.

The amended regulations grant three days of annual leave to employees who have served at the same company for more than six months but less than one year, 10 days (up from the current seven days) after two years of service, 14 days (up from 10 days) after three years, and 15 days (up from 14 days) after five years. Those with more than 10 years of service will receive one additional day for every additional year of service up to a maximum of 30 days.

D. Provide a worker complaint hotline to strengthen oversight:

The Ministry of Labor has provided a complaint hotline (dial: 1955) for workers to file complaints or report employer violations. The ministry will investigate the complaints and follow-up on reported violations to protect the rights and interests of workers.

 

IV. Conclusion

As part of its consistent policy to implement a five-day workweek, the government has amended the LSA to balance the needs of labor and management while promoting reform in a gradual and orderly manner. The amended law provides a legal basis for the implementation of the five-day workweek plan, makes national holidays the same for workers nationwide, protects their right to adequate rest, and increases annual leave days for employees with less seniority. At the same time, it uses the most pragmatic approach to address the needs of employers as well. Looking ahead, the government will focus on improving labor conditions and salary levels by promoting industry upgrading and strengthening the overall economy.