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Employee termination
in Taiwan (China).

SALARY PAYMENT IN New Taiwan dollar (TWD, NT$, $)

CONTRACT LANGUAGES Chinese / English

PAYROLL TAX 17.152%

PAYROLL CYCLE Bi-weekly or monthly

TIME TO HIRE 12 hours

Valid reasons to terminate employment in Taiwan (China)

Taiwan’s Labor Laws set out a specific set of circumstances where employers can terminate an employment with notice and severance pay:

  • Stoppage of business or a transfer of ownership.
  • Alteration of the business nature, forcing a reduction in the number of employees where those employees cannot be reassigned to other suitable positions.
  • Business losses or curtailment of business operations.
  • Suspension of operations for more than one month due to a force majeure event.
  • The employee is incapable of performing the tasks assigned.

The following are circumstances where the employer can terminate an employment without notice or severance pay:

  • The employee is absent from work for three consecutive days, or for six days in a month, without justifiable reason.
  • Misrepresentation of the facts by the employee at the time the labour contract was signed which leads, or may lead, to the employer suffering damage.
  • Serious breaches by the employee of the employment contract or work rules.
  • Intentional disclosure by the employee of the employer’s technological or business secrets.
  • Acts of violence by the employee against the employer, the employer’s family or representative, or other employees.
  • The employee has been sentenced to temporary imprisonment in a final judgment, which cannot be suspended or commuted to a fine.
  • Purposeful damage or abuse to the employer’s property by the employee.

Unfair reasons to terminate employment in Taiwan (China)

Taiwan is not an at-will employment jurisdiction and the LSA does not permit an employer to terminate employees for any reason other than the valid grounds as listed above. Any other form of termination, such as discretionary dismissal, will be considered illegal by the Labor Courts.

Dismissal procedure in Taiwan (China)

The employer must inform the employee in writing of their intention to terminate the contract and must state the reasons for termination. This must be sent via courier including signature upon receipt.

The employer does not need local authority or government permission to dismiss an employee fairly, but they must inform the local authority of the dismissal at least 10 days before the effective date.

The employer must also provide the correct notice and severance pay unless the termination is for one of the ‘no pay’ grounds listed above.

Resignation procedure in Taiwan (China)

Employees wishing to resign are required to give their employer advance notice in writing. Employees must provide the correct amount of notice via a written resignation statement, which states the reason for the resignation.

Hiring in Taiwan, Made Easy

Your business can easily hire employees in Taiwan without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

No, it is not difficult to terminate employment in Taiwan. Termination of an employee’s contract will only be permitted on valid grounds as listed above and must be in accordance with the Labor Standards Act.

The risk of terminating employment in Taiwan is that you may be subject to claims for wrongful dismissal and required to pay the employee’s salary since dismissal plus severance. To mitigate this risk, employers should ensure that they comply with the requirements of the Labor Standards Act and other applicable regulations, such as providing at least notice prior to dismissal and ensuring adequate severance pay.

You can mitigate the risks of employment termination by terminating employees only in cases where there is just cause to do so.

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