Increased Protection for Dispatch Workers and Permanent Residents in Taiwan

Dispatch workers’ rights

In response to the increasing use of dispatch employment (known as agency work in many other countries) and the popularity of the gig economy, amendments to the Labor Standards Act took effect on June 21, 2019, strengthening the protection of workers in this sector. Specifically, employment agencies can now sign only permanent contracts with dispatch employees, rather than fixed-term contracts.

This restriction is to prevent agencies from using fixed-term contracts to circumvent their obligations to pay severance. In the past, agencies would sign fixed-term contracts with dispatch employees based on the period of the dispatch project. The agency could then discharge the dispatch employees at the end of the term without the requirement for a statutory cause for discharge or severance pay.

In another change, companies that use dispatch agencies for some of their labor needs are now responsible for paying employees any wages that the dispatch agency has failed to pay. It is hoped that this change will encourage companies to more rigorously vet agencies before they accept workers from them. These changes will further protect the employment rights of the estimated 150,000 dispatch workers in Taiwan.

Permanent residents’ pensions

Holders of Alien Permanent Resident Certificates are now eligible to be enrolled in Taiwan’s state pension system under the Labor Pension Act. Previously, only those foreign nationals married to a Taiwanese national or holding certain work permits were eligible, with the majority of foreign nationals enrolled in the predecessor system under the Labor Standards Act, which meant that their pensions were non-transferable if they changed employers.

This issue was a long-standing concern of the foreign community in Taiwan, as it was seen as an obstacle to individuals becoming long-term residents. The government expects about 15,000 permanent residents to be positively affected by these changes.

The above changes dovetail with the government’s desire to make Taiwan an attractive place to live and work, while ensuring that people working in nontraditional roles are better protected. Human resources personnel may want to be aware of these changes to ensure that their companies are complying with the law.

Written by Christine Chen of Winkler Partners and Roger James of Ogletree Deakins

© 2019 Winkler Partners and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.