Newsletter
Overtime Issues
With respect to the media coverage of the discussion on whether employers assigning work to employees by LINE outside working hours qualify as having employees work overtime, the legislators plan to propose revising the Labor Standards Act (the "LSA") to require employers to treat assignments given via communication software or text messages outside working hours as an extension of working hours and pay additional wages accordingly in order to protect the interests of employees. In fact, the key to resolving the overtime issue is not in the provisions of the LSA but in defining what constitutes overtime. More details regarding the overtime issue are provided as follows.
"Overtime" is not a term defined under the LSA, but a commonly used term. The LSA refers to overtime with phrases such as "to perform the work outside regular working hours" or "to extend the working hours". The rules governing overtime in the LSA are primarily established under Article 32, Paragraph 1 to Paragraph 3 as follows:
1. When there is a need to have his/her employees work outside regular working hours, the employer, with the consent of the labor union concerned, or if there is no labor union in the business entity, with the approval of a labor-management conference, may extend the working hours.
2. The extension of working hours referred to in the preceding paragraph, combined with the regular working hours shall not exceed twelve hours a day. The total number of hours of overtime work shall not exceed forty-six hours a month.
3. Should the occurrence of an act of God ( i.e., force majeure ), an accident, or an unexpected event necessitate employees to work outside regular working hours, the employer may extend the working hours. However, the employer shall notify the labor union concerned within twenty-four hours from the beginning of the extension. If there is no labor union, the employer shall report the matter to the local competent authority for record purposes. Subsequent to the overtime, the employer shall offer worker suitable time off.
Other rules governing overtime in the LSA include the following:
1. Article 39 of the LSA states that: "Wages shall be paid by an employer to workers for regular day off under Article 36, holidays under Article 37 and annual leaves under Article 38. When the worker agrees to work on a holiday, the employer shall pay the worker double the regular wage. This shall also apply where, with the consent of the worker or the labor union concerned, the worker works to meet seasonal requirements."
2. Article 40 of the LSA states that: "An employer may require workers to suspend all leave provided under Articles 36 to 38, if continuance of work is required owing to an act of God, an accident or unexpected event; provided, however, that double wages shall be paid for the suspended leave, and time off to make up for the suspended leave shall be provided subsequently. In respect of the suspended leave referred to in the preceding paragraph, the employer shall, within 24 hours of the suspension, file a report stating details of the reasons with the local competent authorities for record. "
3. Article 42 of the LSA states that: "An employer shall not compel a worker to accept work beyond regular working hours if the worker is unable to do so on account of poor health or other proper reasons."
4. Article 24 of the LSA states that: "An employer shall pay wages for workers' overtime according to the following formula: 1. Where the overtime does not exceed two hours, in addition to the regular hourly wage, at least one-third of the regular hourly rate shall be paid. 2. Where the overtime exceeds two hours, but less than four hours, in addition to the regular hourly wage, at least two-thirds of the regular hourly rate shall be paid. 3. Where the overtime is requested in accordance with Paragraph 3 of Article 32, double the regular hourly rate shall be paid."
In summary, the guidelines for overtime provided in the LSA are as follows:
1. Overtime refers to work performed outside normal working hours, and can be categorized into (i) extension of normal working hours, and (ii) working on holidays.
2. Overtime should be performed at the employer's request and not at the employee's discretion. Working overtime requires the employer's consent in advance or the employer's approval subsequently.
3. In principle, before employees work overtime the union's consent or the employer-employee meeting's consent should be obtained in advance. Such consent cannot be substituted by the consent of all the employees or any individual employee. Therefore, if a company, which does not have a labor union, needs to have employees work overtime, a labor-management conference should be called according to the law in order to obtain the consent. According to the interpretations delivered by the Ministry of Labor, such consent need not be obtained each time and it may be obtained as a "blanket consent" in advance. Employers who ask employees to work overtime but fail to obtain the consent of the union or the employer-employee meeting in advance will be subject to an administrative fine of no less than NT$20,000 but not more than NT$300,000 according to Article 79 of the LSA.
4. An employer who has employees work beyond regular working hours due to an act of God, an accident, or an unexpected event may be exempted from obtaining the consent of the union or the employer-employee meeting in advance, but shall notify the union within twenty-four hours from the beginning of the overtime. If there is no union, the employer shall report the matter to the local competent authority for record purposes. Under such circumstances, in addition to paying additional wages for the overtime, the employer shall offer workers suitable time off subsequent to the overtime.
An employer who has employees work on holidays due to an act of God, an accident, or an unexpected event, regardless of the presence of a union, shall, within twenty-four hours from the end of the suspension, file a report stating details of the reasons with the local competent authorities for record purposes, provided, however, that wages at double the regular rate shall be paid for the suspended leave, and time off to make up for the suspended leave shall be provided thereafter. Employers who violate the rules set forth above may be subject to an administrative fine of no less than NT$20,000 but not more than NT$300,000 according to Article 79 of the LSA.
5. The extension of working hours combined with the regular working hours shall not exceed twelve hours a day. The total number of overtime hours shall not exceed forty-six hours a month. According to the interpretations delivered by the Ministry of Labor, work on holidays does not have to be counted toward the monthly limit of 46 hours as long as it does not exceed the number of normal working hours. Employers who violate the rules set forth above may be subject to an administrative fine of no less than NT$20,000 but no more than NT$300,000 according to Article 79 of the LSA.
6. An employer will not need to obtain an employee's consent for the employee to work overtime. The employer only needs the prior consent of the union or the employer-employee meeting. However, an employer shall obtain an employee's consent to work on holidays.
7. Regardless of the circumstances of overtime, an employer shall not compel a worker to accept work beyond regular working hours if the worker is unable to do so on account of poor health or other proper reasons. Employers who fail to comply with such restriction shall be subject to criminal liability and may be sentenced to imprisonment of not more than six months, be detained, and/or fined not more than NT$300,000.
8. Employers shall pay employees overtime wages. The formula for calculating overtime wages is: where the overtime does not exceed two hours, in addition to the regular hourly wage, at least one-third of the regular hourly rate shall be paid; where the overtime exceeds two hours, in addition to the regular hourly wage, at least two-thirds of the regular hourly rate shall be paid for the overtime exceeding two hours. One day's wage shall be paid for working on a holiday regardless of the length of the overtime on the holiday.
It can be seen from above that the case in which an employer gives an employee assignments via LINE outside working hours and the employee indeed performs the work should be treated as overtime and no revision of the LSA is required. The real difficulty in the overtime issue is how to determine what constitutes overtime. In the manufacturing sector, a factory worker start work when he/she enters the factory and stop after he/she leaves. Therefore, overtime is easier to determine in such cases. However, in the service sector, employees who remain in the office outside normal working hours may not be working. Employees may choose not to leave the office to suit their own needs, while employees who leave the office may be performing their duties. To resolve the difficulties above, in practice, companies would announce overtime guidelines to require employees to submit an application before working overtime and may not proceed without the approval of the employer or the supervisor. If an application cannot be made in advance for unexpected overtime, the application may be submitted after the overtime work. Overtime will be accepted only with the approval of the employer or the supervisor. Employers will pay overtime wages only for approved overtime.
The practice described above is clearly defined, but imposes a psychological burden on employees as it requires employees to submit applications and obtain the approval of the employer or supervisor. It also gives the employer or supervisor the chance to deny an employee's application. This is the real issue of overtime. Hence, revising the LSA will not be an adequate solution to the real overtime issue.