Labor Regulations and Insurance

Question 1: Do Taiwan Labor Regulations apply to foreign investors? How does one acquire information regarding the Labor Act and related regulations?

Answer:

Whether the Labor Act will be applicable to a business unit will be dependent upon the scope of the said law. Related laws include: the Basic Labor Act, the Statutes Governing Labor Insurance, the Labor Safety and Hygiene Law, the Labor Union Law, the Group Negotiation Law, the Laws Governing the Handling Labor-Employer Negotiation, the Employee Welfare Fund Act, the Employment Service Law, and the National Health Insurance Law. The full text of these laws can be accessed at the websites of the Council of Labor Affairs, Executive Yuan, and the Bureau of National Health Insurance.

Question 2: What are the average monthly earnings for workers in different sectors in Taiwan, R.O.C.?

Answer:

Average Monthly Earnings for Workers in Industrial Sectors

(Unit: NT dollar)

Sector / Year	2002	2003	2004	2005	2006
Mining and Quarrying	45,006	47,263	45,297	45,893	49,574
Manufacturing	38,565	39,583	40,611	41,751	42,293
Electricity, Gas, and Water	89,591	91,034	90,711	89,264	95,664
Construction	36,848	37,219	37,921	38,455	39,175

Average Monthly Earnings for Workers in Service Sectors

(Unit: NT dollar)

Sector / Year	2002	2003	2004	2005	2006
Trade	39,202	39,799	40,129	40,033	40,028
Transport, Storage, and Communication	51,564	51,396	51,704	53,793	53,313
Finance and Insurance	65,767	64,693	66,743	65,097	69,132
Real estate, Rental and Leasing	40,714	39,872	40,006	39,129	38,213
Professional, Scientific and Technical Services	49,587	50,990	52,833	54,868	55,579

Source: Directorate-General of Budget, Accounting and Statistics, Executive Yuan

Question 3: Who does the NHI plan cover? What is the ratio of insurance payment to be paid by the insurer and the insured under the ROC National Health Insurance (NHI) Program? How does one calculate insurance premiums?

Answer:

1. The NHI system is designed to provide health coverage for all people living in Taiwan. The following persons listed below are obligated to register for the NHI plan and pay insurance fees, and may not forfeit the NHI plan.

   ROC Nationals

   ROC nationals who have a registered residence in Taiwan must be insured after four months; however, when reestablishing residence, the said person must be insured from the date of establishment; employees must be insured from the first day of employment. Newborn children registering in their place of residence in Taiwan must be insured from the date of birth.

   Foreign Nationals (Including Hong Kong, Macao, and Mainland China)

   Persons who have a Taiwan Region Residence Permit, a Taiwan residence exit/entry permit, an Alien Residence Certificate, an Alien Permanent Residence Certificate, or any other documentation recognized by an designated NHI organization (e.g., documentation giving permission to come to Taiwan for family reunions, to take up residence with family, to live as a long-term resident, or to engage technology industry research or technology research) must be insured after four months in the ROC. Employees must be insured from the first day of employment.

2. Insurance Payment Ratios under the National Health Insurance Program

   The National Health Insurance Program classifies the insured (including the insured's dependents) into six different categories. The insurance fee is jointly paid by the insurer, insuring party (employer) and the government based on different ratios for the different categories. Please see the table below for the ratios.

3. Insurance rates under the National Health Insurance Program are calculated as follows:

   For the Insured and Dependents

   The insured can claim up to a total of three dependents; those who have more than three dependents will only receive a premium for three of those dependents.

   1. Categories 1 to 3 of the Insured and its Dependents:

      Insurance Rate = Insurance Amount × Insurance Premium Rate^[1] × contribution rate × (Insured + No. of Dependents)

   2. Category 4 Insured (includes military personnel, military school students, bereaved families of deceased military personnel, public service of lieu of military service) and Category 5 insured (low-income citizens)^[2]:

      As of Sept. 1, 2002, the monthly premium for per person is NTD 1, 078, which is wholly subsidized by the related agencies.

   3. Category 6 Insured and its Dependents:

      • Veterans: Veterans pay the full insurance premium and are reimbursed by the government.

      • Veteran and Dependents:

        Self Paid Premium = Average Premium^[3] × Contribution Rate (30%) × No. of Dependents

      • Citizens without a fixed profession from other areas:

        Self Paid Premium = Average Premium × Contribution Rate (60%) × (Insured + No. of Dependents)

   The Employer

   Calculation of Premium:

   Premium = insurance amount × premium rate × contribution rate × (Insured + No. of Dependents^[4])

   Government Subsidies

   1. Categories 1 to 3

      Premium = insurance amount × premium rate × contribution rate × (Insured + Average No. of Dependents)

   2. Category 4 Insured:

      To be fully subsidized by the Ministry of Defense and the Ministry of Interior.

   3. Category 5 Insured:

      To be fully subsidized by the government.

   4. Category 6 Insured:

      Premium = Average Premium × Contribution Rate × (Insured + No. of Dependents)

Notes:

1. The insurance rate is currently 4.55%.
2. Low-income citizens, regardless of whether they have a job or not, fall under the Category 5 Insured in their place of residence, of which their local government shall subsidize insurance costs.
3. Insurance premiums for Category 6 insured (including veterans, veterans' dependents' and persons without continuous employment) have remained at NTD 1,007 since July 1998
4. Average Number of Dependents is based on the average number of actual dependents for the insured under Types 1 to 3. As of January 1, 2001, the average number of dependents has been adjusted to 0.78.

Table of Insurance Premium Payment Rates under the National Health Insurance Program

Beneficiary Category			Payment Ratio (%)
			Insured	Insuring Party	Government
Category 1	Civil Servants, Government Employees Volunteer Military Personnel	Insured and Dependent(s)	30	70	0
	Private School Teachers and School Staff	Insured and Dependent(s)	30	35	35
	Employees of Govt. and Private, Organizations with a Fixed Employer	Insured and Dependent(s)	30	60	10
	Employers, Self-employed, Specialized/skilled professionals	Insured and Dependent(s)	100	0	0
Category 2	Laborers Foreign national seamen serving on Taiwan vessels	Insured and Dependent(s)	60	0	40
Category 3	Farmers, Fishermen, Members of Agricultural and Water Associations	Insured and Dependent(s)	30	0	70
Category 4	Military Personnel, Students of Military Schools, Dependents of Deceased, Military Personnel, Inactive Military Personnel	Insured	0	0	100
Category 5	Family Household Recipients	Insured and Dependent(s)	0	0	100
Category 6	Veterans and their dependents	Insured	0	0	100
		Dependent(s)	30	0	70
	Regional-level reside	Dependent(s)	60	0	40

Detailed information can be obtained from the Bureau of National Health Insurance.

E-mail this page.