1. Written Contract Requirement:
Taiwanese labor laws mandate that an employment contract be established in writing for all employment relationships. The contract should clearly outline the terms and conditions of employment, including job responsibilities, working hours, wages, benefits, and other relevant details.
2. Probationary Period:
Employers have the option to include a probationary period in the employment contract. During this period, which generally lasts no longer than three months, the employer can assess the employee’s suitability for the position. However, the maximum probationary period may vary depending on the type of employment and is subject to certain limitations imposed by labor regulations.
3. Working Hours and Overtime:
The employment contract should specify the regular working hours, which should not exceed eight hours per day or forty hours per week. If an employee is required to work beyond these hours, overtime compensation should be addressed in the contract. In Taiwan, overtime pay is generally 1.33 times the regular hourly wage for the first two hours of overtime and 1.66 times thereafter.
4. Salary and Benefits:
The contract should clearly state the employee’s salary, including the frequency and method of payment. It is important to comply with Taiwan’s minimum wage requirements. Additionally, any agreed-upon benefits such as health insurance, vacation leave, annual bonuses, and retirement provisions should be clearly outlined.
5. Termination and Notice Period:
The contract should include provisions regarding termination of employment. Taiwanese labor laws distinguish between termination initiated by the employer and resignation by the employee. Specific notice periods are typically required, depending on the length of service, with longer notice periods for employees with more years of service. Severance pay obligations may also arise based on the reason for termination and the duration of employment.
6. Intellectual Property and Confidentiality:
To protect company interests, it is advisable to include provisions regarding intellectual property rights and confidentiality in the employment contract. Clearly defining the ownership of intellectual property developed during the course of employment and outlining confidentiality obligations can help safeguard the employer’s proprietary information.
7. Dispute Resolution:
To address any potential employment-related disputes, it is recommended to include a clause specifying the preferred method of dispute resolution. This can include options such as negotiation, mediation, or arbitration. Taiwanese labor laws provide various avenues for resolving disputes, and the contract should outline the agreed-upon process.
Drafting a comprehensive employment contract is crucial when hiring an employee in Taiwan. It is essential to ensure compliance with local labor laws and regulations while considering the specific needs of the employer-employee relationship. By addressing key considerations such as written contract requirements, probationary periods, working hours, compensation, termination, intellectual property, and dispute resolution, employers can establish a solid foundation for a successful employment relationship in Taiwan. Seeking professional legal advice is recommended to ensure compliance with current labor laws and regulations in Taiwan.