2014-11-17
Proposed Amendment to Labor Standards Act to Protect Labor
The Executive Yuan has proposed amendments to the Labor Standards Act (“Amendment”) to further protect the interest of labour. The main points in the proposed Amendment are as follows:
(1) The order of priority for payment of unpaid wages pension under the old pension plan, and severance pay under the old and new plans shall have the same priority as credit rights secured with mortgages of first priority, pledges, or retention rights.
(2) Unpaid pensions under the old pension plan and severance pay under the old and new plans, together with unpaid, shall be covered by the Arrears Payment Fund and the rate for contributing to the Fund shall be increased from one-thousandth to 1.5-thousandth.
(3) Penalties shall be imposed on enterprises that do not contribute sufficient funds to their reserve fund accounts for the retirement benefits of workers who have seniority under the old plan.
(4) A system to ascertain the status of an enterprise’s reserve funds account shall be established to allow a bank to check whether an enterprise has contributed sufficient funds when an enterprise applies for a loan.
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