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The Implementation of "Reduction of Working Hours" and the Relating Subsidies in Response to COVID-19



As the spread of the coronavirus disease (COVID-19) has been rapidly escalating in recent weeks, many enterprises are facing revenue losses and some of them have further decided to "negotiate with employees to reduce working hours", for the purpose of reducing the labor costs and avoiding layoffs.
 
According to the interpretation issued by the Ministry of Labor (MOL) on February 10th, 2020, companies affected by the COVID-19 outbreak that are having difficulty in operating a business may meet the "Guidelines for Employers and Employees to Negotiate for Reducing Working Hours in Response to Economic Impact" ("Guidelines") promulgated by the MOL to reduce the working hours through negotiation between employers and employees. Below please find a summary of the Guidelines:
 
1.   The employers and employees should negotiate and agree to reduce the working hours and salaries in writing.
 
2.   Employers that intend to reduce the working hours through negotiation with the employees should first consider taking an action of reducing the benefits and bonus of the responsible persons, directors, supervisors, general managers or other high-level managers.  After that, employers may reduce working hours of the employees if necessary.
 
3.   Employers may not reduce the working hours for more than 3 months.  If the extension is required, employers should obtain a new consent from the employees.
 
4.   For the monthly-rated full-time employees, they should not be paid lower than the minimum salary (NT$23,800 per month).
 
5.   Employers should report to the local labor authority after reaching consent with employees.
 
In addition, in response to the increasing number of employees taking unpaid leave due to the pandemic, the MOL, on March 27th, announced a program, "Satisfying Employment Project", to subsidize workers for their decreased income due to the reduction of working hours.  Employers shall pay attention to this program and provide the qualified employees with relevant information.
 
1.   Qualification of Applicants:
 
(1) the employees shall be enrolled in the employment insurance program;
 
(2) the implementation period of reduction of working hours is within the project period (from 15th January 2020 to 31st December 2020);
 
(3) the implementation of reduction of working hours has been reported to the authority and the period lasts 30 days or more, and
 
(4) the applicants should be a monthly-rated full-time employee or a part-time employee who has entered into an agreement with the employer on the regular working days and time.
 
2.  Contents of the Subsidy:
 
(1) the amount of the subsidy shall be 50% of the salary difference between an applicant's average insured monthly salary during the one-year period before the reduction of working hours and the reduced salary of the current month when an applicant applies for subsidy. The subsidy shall be paid monthly;
 
(2) the subsidy is capped at NT$11,000 per month and up to 6 months; and
 
(3) the applicants are prohibited from receiving the subsidies of "Recharge and Move on Training Plan" or other similar subsidies simultaneously.
 

For any further information about employees relating to COVID-19, please refer to the MLO's website (https://www.mol.gov.tw/topic/44761/) and check the updated information about the prevention and subsidies for the pandemic.

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