Taiwan reminds employers to follow the law on overtime pay

台灣提醒雇主遵守加班工資法則

Days off instead of extra pay, minimum overtime threshold among common illegal practices


TAIPEI (Taiwan News) — Taiwan’s labor ministry has reminded employers to pay workers overtime according to the law, and described several ways overtime is commonly underpaid.

On Tuesday (Sept. 19) the Ministry of Labor said fines issued to businesses for breaking overtime laws reached NT$62 million (US$1.94 million) in 2022, and asked employers to do better, per RTI. The ministry said that if an employee works any overtime at all, they must be paid in accordance with the law.

The most common labor violation is employers requiring employees to take extra leave in return for working overtime instead of receiving overtime pay, the ministry said. If an employer extends working hours on weekdays or rest days, they must pay employees overtime pay. Only those who willingly accept extra leave hours can be compensated in this way.

The ministry said a second common issue is employers underpaying staff for overtime worked. Employees should be paid overtime based on their monthly salary divided by the number of hours they normally work. However, the ministry said a “basic salary” is often used for this calculation.

It is common for employers to define certain parts of the salary employees receive monthly as an “attendance bonus,” “night shift bonus,” or similar, the ministry said. This means that often overtime hours are calculated using an hourly rate based on the “basic salary” that does not include these “bonuses.”

The labor ministry’s Huang Wei-chen (黃維琛) said that these “bonuses” are regarded by the ministry as part of an employee’s wage.

“We need to judge if each payment item (on a person’s pay stub) is renumeration for work. If renumeration items are not related to work, they can be classified as a benefit, otherwise they will be treated as salary,” Huang said.

Further, employees' overtime wages must be calculated to the minute, the ministry said. It said that frequently employers will only accept overtime claims if staff work an hour extra minimum — but this is illegal.

In Taiwan, overtime is paid at a rate of between one to two thirds extra on top of the normal hourly wage, depending on how many additional hours are worked. The labor ministry said employees should also take note of the number decimal points added to the above numbers. It added if the third digit is rounded off it will affect take home pay.

Taiwan based labor activist Roy Ngerng (鄞義林) told Taiwan News that even though the issue is now receiving media attention, it is inadequate for the labor ministry to simply put out a statement saying the practice is illegal.

“The key issue is that workers might feel powerless about reporting such violations because they fear losing their jobs or be treated unfairly by their employer in retaliation,” he said.

Ngerng said the labor ministry should educate and remind employers of their obligations toward employees on a regular basis. They should conduct checks on businesses who regularly break the law. He also said it should be made easier for workers to organize.

If it is easier for workers to join unions, they will have adequate support when their rights are violated or they face harassment or retaliation from employers, Ngerng said.