This article is written by Aman Sagar, who is pursuing a Diploma in Labour, Employment and Industrial Laws (including POSH) for HR Managers from LawSikho.
Taiwan is a small nation which is globally renowned for their highly developed technology with the likes of electronic brands such as Asus, Acer, HTC etc., automotive components which are exported all over the world, the famous Taipei 101 building, which was once the tallest buildings in the world, precious Jade stone & Bubble Tea which is the latest sensation nowadays in beverages. Taiwan has had a mixed culture of primarily Chinese, Japanese with some shades of American culture in it over the years.
Although the Taiwanese government has always made their stand clear they are a sovereign nation, the People’s Republic of China always claims it is one of their own just like it does to Arunachal Pradesh with India, the Spratly Islands in the South China Sea, Senkaku and Ryukyu Islands with Japan and many other borderline disputes at different fronts. But this factor has never come in the way of the development of this nation. Taiwan has world-class infrastructure when it comes to network connectivity, public transportation, health care, technologically empowered industries, modern universities offering higher education to students from all over the world and is the 17th richest nation in the world based on per capita income. Also, the Taiwanese government has been quite progressive in their stride and kept the welfare of its people a priority which is almost ideal when compared to some of its neighbouring countries.
The nation is a proud member of elites, The Four Asian tigers namely Singapore, Hong Kong, South Korea and Taiwan that are high growth economies achieved by massive export orientation, serving as the logistics hub for the whole of SouthEast Asia, swift industrialisation over decades of consistent efforts along with empowering and developing its populace. Taiwan is a front runner in its agenda towards sustainable development paying a lot of attention to climate change along with responsible consumption and production to reduce carbon footprint, promoting a culture of good health and well-being of its citizens, eradicating poverty and many more strategic enablers to attain continuous improvement in every sphere of their life.
A brief overview of Taiwan’s labour laws
Taiwan ranks 15th out of 190 economies in the Ease of doing business Index based in the World Bank Report 2020. The nation has steadily progressed with about 6% growth in GDP almost in a consistent manner in the last 3 decades. When we observe the labour legislation in this nation, considerable efforts and measures have been taken by the government to make Taiwan an employer-friendly place that is conducive for business expansion and opportunities to let in foreign talent to work as well as set up their business and prosper in the present environment.
The primary legislation with respect to worker’s rights dealing with the terms and conditions of employment in almost every industry & occupation within the country is termed the Labour Standards Act. LSA also covers foreign nationals who may be working as domestic workers. The government gives tax incentives to employers who recruit foreigners in certain industries.
LSA mandates that every foreign national who is working in Taiwan is required to have a work permit before he/she can apply for residency. If the worker is not visa-exempt, then they ought to apply for a residency visa before entering the country. They can obtain a visa from any Taiwanese embassy in their jurisdiction by showing their work permit, valid passport, and other necessary supporting documents.
The legislation promotes a sense of balance towards work and life of the workers and have put a limit on the hours of work within a week kept at 40 hours in a week with a capping of not more than 8 hours per day (otherwise overtime paid) and can in no circumstances exceed more than 48 hours (including overtime). Every worker is entitled to 2 days off within a week with one mandatory off and the other being a flexible day for rest. A worker can work on a flexible day with overtime pay but not on a mandatory off. Any violation against this and the employers may have to pay heavy penalties up to 10,000 US$ for non-compliance.
LSA makes it compulsory for employers to make considerable provisions for Annual leaves for their workers. It is the duty of the employers to make the workers aware of their annual leave entitlements as well as benefits. Women employees are given 8 weeks of paid maternity leave (along with the provision of miscarriage) provided they have worked for at least 6 months with the company. Otherwise, entitled to half of the standard salary is paid. Even males are given 3 days of paid paternity leave.
There is a substantial level of protection to workers from ill practices of employers such as termination without a cause. The grounds for termination are quite broad and include redundancies, force majeure, misconduct, absence without any definite reason etc. Employers are required to give advanced procedural notice to the worker before going ahead and terminating his/her services.
Shortcomings in labour laws in Taiwan
The amendments made in LSA in the recent past have brought in some level of distress both in the workers as well as employer’s front. Employers have often criticised the legislation because of the high cost of compliance which often surpasses more than 20,000 US$ especially when it comes to overtime pay rules. Additionally, LSA is not very well structured at municipal levels leaving loopholes for individuals to take undue advantage of. Foreign entrepreneurs feel that it is irritating to see what they describe as rampant bureaucracy and institutional inflexibility, especially when it comes to the banking system. Foreigners working in local establishments are often left dissatisfied by what they see as an inelastic, hierarchical corporate culture which they may not be exposed to in their home country.
A recent amendment in LSA passed in January 2018 permits an employer to make their employee work for more than 12 days in a row with just an 8-hour break between the shifts. To this, Taiwanese workers have protested and termed this amendment as the worst rule in history because of its inhumane nature which doesn’t highlight the overworked as well as underpaid workers in almost every sector in Taiwan. Albeit, the government responded by saying that it is a win-win for both the employers as well as since it offers the opportunity of earning a good income.
Government easing legislation to let in foreign citizens
Taiwan’s government has been working toward easing some of the entry barriers for foreign professionals in order to attract and retain top foreign talent which they feel would be a long-term solution to some of their problems such as low birth rate and shortage of workers. From relaxing their rules for the visa, employment, residency, dependent’s stay to offering pension, health insurance, tax and other benefits, the government is not leaving any stone unturned to compete with economies such as Singapore, South Korea, Japan to be a country of choice for every foreigner.
The proposed amendment to the Act for the recruitment and employment of foreign professional talent will also allow foreign graduates from prestigious universities to work in Taiwan despite having no prior work experience. The amendment which was approved on May 10th, 2021 includes three components explained below-
1. Relaxed norms for foreign educators
Taiwan as a nation plans to become an Anglo-Mandarin “bilingual nation” by 2030 and in order to address the need to educate children of foreign professionals, the Education Ministry will relax the requirements for foreign educators to be employed at their schools.
2. Shortened norms for permanent residency
The continuous residence obligation for foreigners to be eligible for permanent residency will be reduced from 5 years to 3 years. At the same time, the residency for foreign workers as well as foreign special professionals, an Employment Gold Card who have expertise in specialised areas such as science and technology, economics, education, culture, arts, sports, finance, architecture who have obtained post-graduation or doctorate degrees in Taiwan can be reduced by one to two years.
3. Tax rebates and health insurance
Tax rebates for Employment Gold Card professionals shall be extended from 3 to 5 years. Over this period, such professionals who make an annual income of more than 3 million NT$ (equivalent to the US $ 1,06,000) are given a 50% tax rebate.
In addition to this, all foreign professionals along with their family will be insured under Taiwan’s National Health Insurance which normally takes a minimum of 6 months to become eligible for. The bill will also relax requirements for foreign teachers in response to Taiwan’s plan to become a Chinese-English bilingual nation by 2030. In addition, fresh graduates from the world’s top 500 universities will be eligible to seek a job in Taiwan without the current criterion of two years’ work experience.
Unfortunately, the legislation miserably fails to address the blue-collar workers who are in short supply and the need of the hour is to give due attention to this problem. Although the government responded by saying that this issue will be dealt with separately and cannot be combined with what has been proposed within the Act for the recruitment and employment of foreign professional talent.
In order to give wings of consistent growth and development and support the 5+2 Industries and other innovative industries in Taiwan, there is a big need for foreign talent who will bring in the technical know-how, international perspective to domestic industries and innovative quotient and many other positives. Till now, the government is receiving a good number of applicants with Americans being the highest in number followed by the UK, Hong Kong, Malaysians etc. The government in order to compete with nations like Singapore, Hong Kong need to streamline some of their inefficient processes of Entrepreneur and Worker Visa procedures. Also, they would be required to offer a higher sense of flexibility and bring in amendments for the faster transformation of their banking systems which is considered highly inefficacious.
- What’s behind the China-Taiwan divide? https://www.bbc.com/news/world-asia-34729538
- Changing Patterns of Industrial Relations in Taiwan https://library.fes.de/libalt/journals/swetsfulltext/17087707.pdf
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