International Labor & Employment Law Committee Newsletter

Issue: March 2014

Editor: Ute Krudewagen, Associate Editor: Amie Aldana | Africa and Middle East Editor: Karen Seigel | Asia and Oceania Editor: Jason Noakes | Canada Editor: Gilles Touchette | European Editor: Paul Callaghan | Latin America Editor: Juan Carlos Varela | Law Student Editor: Liam Woods | USA: Trent Sutton


More Professions Covered under Labor Standards Act

John Eastwood, Partner, and Heather Hsiao, Associate, Eiger, Taipei, Taiwan

Several professions have recently been declared as being no longer exempt from the protections provided under the Labor Standards Act ("LSA") by Taiwan's Ministry of Labor (known as the Council of Labor Affairs until February 18, 2014).

From January 1, 2014, medical staff such as nurses, paramedics, psychiatric ward workers, and other types of medical technicians are now covered under the LSA. Doctors, however, remain exempt.

From April 1, 2014, lawyers will no longer be exempt from the LSA.

Later this year, commencing July 1, 2014, building management employees such as private security guards and cleaning staff will be no longer be exempt.

However, the recent changes also mean that some categories of employees will become exempt from the LSA. In August 2014, private school employees (with the exception of teachers) will become exempt, and farmers' group employees, such as those working for cooperatives, are slated to become exempt at the beginning of 2015.

The LSA was promulgated in 1984 to protect employee rights and interests in regards to contracts, wages, work hours, leaves of absence, and work rules, among other items. The government declared in 1998 that all industries and occupations are subject to the LSA, and most workers in Taiwan fall under, and enjoy the benefits of the LSA. Some professions, however, have been declared exempt from the LSA and do not, for example, enjoy benefits such as overtime pay and sick leave benefits provided under the LSA.

It should be noted that many businesses base their work rules and benefits on the minimum standards outlined in the LSA, even if their industry is not covered by the LSA. Professions that remain exempt include civil servants, teachers, coaches, athletes, and referees. Employees of international civic organizations also remain exempt.

Foreign Spouses Now Eligible to Join the Labor Pension Act Program

John Eastwood, Partner, and Heather Hsiao, Associate, Eiger, Taipei, Taiwan

Beginning this year, foreign workers employed in Taiwan who are married to a Taiwan national are now eligible to join the retirement program provided for under the Labor Pension Act ("LPA"), following an amendment to Article 7.1.2 of the LPA.

The LPA came into force on July 1, 2005, to replace the pension program previously provided under the Labor Standards Act. Workers were given a choice of either staying with the old LSA system that year, or joining the new LPA system. However, foreign workers in Taiwan have not been allowed to join the newer LPA system.

Under the LPA system, an employee's pension funds are deposited into an individual, portable account rather than being added into their current employer's general pension fund. The funds in the individual accounts will continue to accrue even if the employee changes jobs. Under the old LSA system, an employee loses their pension if they change companies. The old system is slowly being phased out, as employees who take jobs with new employers can only join the LPA system.

The amended LPA only gives foreign workers the option of joining the new system if they are married to a Taiwan national. Foreigners working in Taiwan who are not married to a Taiwan national must stick with the old LSA system, even if they are a permanent resident.

Foreign spouses who would like to stay with the old LSA program are required to notify their employer in writing by July 16, 2014, otherwise they will automatically be transferred to the new LPA plan.


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