Companies Reducing Salary - Legal Position

Legal Legal - Work
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1

Hi All,
I wanted to ask about the situation where if you are working for a Taiwanese company, not a buxiban, and in the current climate, business is not so good, they can legally cut your salary without your agreement?

As this is a situation which could affect quite a few people this year and is a common situation now in many companies, I wanted to know what the legal situation would be if anyone knows.

Specifically, does the boss have to get you to agree to take the pay cut in writing?
If he cuts your pay, but you haven’t agreed, can this count as making an illegal salary deduction according to the CLA rules?
Can you say that you expect to be paid in full and if he can’t pay you he should make you redundant, therefore making you eligible for unemployment benefit?

I am actually quite keen to be fired / made redundant as this would also release me from some of the pain in the ass contract clauses, but many employers seem to stop paying you and don’t sign the redundancy slip either which is a pain in the ass too.

By the way, salary is not specified in the contract, but I have two years of pay slips as evidence of the basic monthly salary amount.

Any comments or advice would be greatly appreciated.

Thanks

2

All I can tell you is that when our company forced us to take some unpaid leave recently, we all had to sign something agreeing to it.

I asked some friends in HR what would happen if someone refused to sign and they shrugged their shoulders and said, “Dunno. No-one has ever refused.”

3

Your salary is considered one of the key terms of your employment contract–and rightly so! It cannot be reduced without your consent. If you refuse, your employer’s only recourse is to terminate you and pay you severance (usually one month for one year of employment). They are also required to give you at least seven days advance notice. This can also be converted into severance pay. If you are a Taiwanese national and are terminated with severance pay, you are eligible for unemployment benefits. No one seems to be sure whether foreigners are eligible for unemployment. We should be given that we pay into the labor insurance scheme like everyone else. Let us know if you find out.

Threaten to report your employer to the CLA and your local labor board and refuse to sign anything. Taiwanese companies really, really hate paying severance. In the past, they have often kept people on quietly just to avoid ‘wasting money’. Of course they end paying out far more in salarly to unproductive, disgruntled employee. That’s changing these days, but don’t sign anything. Note that they also can’t change your place of work or main duties etc.

Most of the above is untrue if you are a member of upper management. In that case, you can be terminated anytime w/o severance. These folks usually have some kind of compensation written into their contract though.

[quote=“blightyboy”]Hi All,
I wanted to ask about the situation where if you are working for a Taiwanese company, not a buxiban, and in the current climate, business is not so good, they can legally cut your salary without your agreement?

As this is a situation which could affect quite a few people this year and is a common situation now in many companies, I wanted to know what the legal situation would be if anyone knows.

Specifically, does the boss have to get you to agree to take the pay cut in writing?
If he cuts your pay, but you haven’t agreed, can this count as making an illegal salary deduction according to the CLA rules?
Can you say that you expect to be paid in full and if he can’t pay you he should make you redundant, therefore making you eligible for unemployment benefit?

I am actually quite keen to be fired / made redundant as this would also release me from some of the pain in the ass contract clauses, but many employers seem to stop paying you and don’t sign the redundancy slip either which is a pain in the ass too.

By the way, salary is not specified in the contract, but I have two years of pay slips as evidence of the basic monthly salary amount.

Any comments or advice would be greatly appreciated.

Thanks[/quote]

4

If you plan on involving the CLA you’d better act fast. They have a MASSIVE backlog of cases to investigate of laid-off employees who have been denied any severance. It could take months before your turn comes up.

5

Dear All,
thanks so much for the comments and advice. As I said this is only a “likely to happen” at the moment, because they have started to cut other staff salaries. I do like to be prepared as I think that when faced with these legal / employment issues, we usually screw it up because we didn’t know that we should / shouldn’t have done X, Y, or Z at the time.

I will keep you posted.

Regarding the unemployment benefit, that is covered in another post in another thread, but I have to tell you that I am actually quite impressed with the CLA response in Taichung over litigation about unpaid salaries and other issues.

My wife has had an issue with a previous company (No details as it is still ongoing), but the arbitration was great and very fair. A word of advice is be very nice to the guy leading the arbiration and be prepared to compromise a little. When you go through the arbitration meeting the notes from the meeting include the opinions of the arbitrator according to the labour law and they are signed by both parties. In our case this meant the arbitrator writing down that the company had definitely broken the labour laws and was 100% liable for a fine, but still wanted to waste time taking this to court! Brilliant!

Most importantly, if you do go to court, the judge gets a copy of these notes from the CLA. So when the arbitrator says X company has ignored labour regulations and refuses to negotiate, it really helps you and makes them look very bad. The fact that they signed the notes also means they can’t then deny they wouldn’t negotiate etc.

Anyway enough ramblings and thanks for all the comments so far.

6

Yeah, we all had to sign when they knocked 10% off back in December.
Unfortunately I was in no position to force the issue, so I had to bite it.

7

Yeah we all had to sign a new contract that stated the change of employment rules.

8

I once got cut, and they just did it. I was not asked to sign anything.

It pissed me off to the extent where I started to look for a new job, I left the company a few weeks later.

9

Hello,

My company is cutting my salary also. At first i thought it is for the tax withholding but now i find it isn’t. I am working as sales so i am not teaching.

The minimum salary is 48,000/mo or should be right?
I see my tax paper and the total shown on there is more than what i really earned. How can i know what is going on?

I worked for more than 2 years and everytime i bring this question up about what are the deductions i am being told to wait someone to explain to me and the explanation is always … no clear answer as of yet.
I have a contract stating 48,000/mo

I should as the CLA for more information right? How about the tax payment, can i ask them to look into what is going on?

Thanks

10

Hi nazmikarakoc,

It should be fairly easy to work out from your pay slip. It should show your total salary, then show how much is taken off for tax and national insurance etc. So if your take home pay is 48K, then the amount on the slip should be 48K plus all of the deductions. If it isn’t, I would ask a local friend to have a look at the payslip and see if it makes sense to them. There wouldn’t be any advantage in claiming that your salary was higher to them, but if they are witholding a portion of your salary it should be clear from the payslip. It could hurt you however when you file your tak returns as your income would be artificially higher and you would be liable for more tax.

Cheers

11

I wasn’t sure if I should post this here or not, but it seems pretty related to my issue.

I’ve been working for the same company for over a year and a half and my current contract won’t expire until Feb. 2011 (They got me a 3-year work visa when I resigned after a year). Anyway, since I began, I have been working 35 hours a week, set schedule Mon-Fri. Now all of a sudden they’ve decided that they want me to change to 40 hours a week, but with no increase in my pay. They’re saying that they’ve “accidentally” had me on the wrong schedule since I started. :loco:

So, I’ve refused the change. I feel that we have a contract already, and changes like this should be taken care of if I decide to resign (one problem is that my hours are not specifically stated in the contract, just the pay). I decided to refuse the schedule change because I figured they were just blowing smoke and they knew they couldn’t legally make the change unless I actually agreed to it.

Well, now they are advertising for my job on many of the job websites. Today, they had their first interview for my position.

Is there anything I can do? I’ve tried calling all the numbers on the government websites, but they keep passing me off to other people and other agencies. I was planning to wait to speak to people at that TIWA thing that’s coming up on the 6th, but I’m not sure if I’ll make it that long.

Any advice? I know I should just go, but with no other job prospects at the moment, that seems a bit scary.

12

Have they terminated you or given you notice? How long have you worked there? If so, they need to pay you severance. If you live in Taipei, you will need to contact the Labor Board and file a complaint if you are terminated without cause and without severance. There are a lot of threads.

I suggest that you talk to your manager right away and tell him that you know that they are interviewing and that they do not ahve cause to terminate you and you WILL file a complaint with the labor board.

english.taipei.gov.tw/labor/inde … ordid=1674

Send them the Chinese version of the site.

You are basically correct that they cannot change your hours. Maybe they hoped you would quit when they did that so that tehy would not have to pay severance.

13

I haven’t been terminated yet. I’ve told my manager that I would go to the CLA already, but he doesn’t really care if I do or not. The issue is coming from the owner of the company, not my department manager.

Honestly, I think the owner wants to hire my replacement, have me train him/her, and then get rid of me because I cost too much. As my manager has explained to me, the owner’s position is that he could hire two people with the salary he pays me, which really leads me to believe that adding the hours is more of a power play than anything else.

My manager keeps telling me that I need to “compromise” with the owner on this one, so I said I would add the extra hours if my pay was increased as well. According to them, that is not a compromise. Apparently, a compromise is me bending over and taking it.

14

Well, your prospects don’t sound so great there. Have you told them that they will have to pay you severance–one month for every year? If you are expensive, they won’t like that. You don’t go to the CLA. You have to go to your LOCAL labor department or bureau. Where do you work?

15

Well, they just got rid of a Taiwanese worker in my department. She had been with the company for 3 years (that seems to be the limit on employment at the place) and they paid her the 3 months severance. I’ve only been there for a year and six months, so I guess they wouldn’t have issues paying me off too. Of course, it’s probably in their best interest that I leave on my own.

I work in Taipei City (but live in County, if that matters).

I was hoping that all of this would just blow over when I refused the change. I’m a year away from my APRC and was hoping to just hang out here until I got it. Once I make the complaint, I’m sure they get rid of me. I’m worried that it will be more difficult to find another job after that if I have a record of complaining to the authorities.

16

OK, so if you are terminated and they don’t pay your severance, complain to the Taipei City Labor Department. See the link I posted before. They will owe you 1.5 months.

Filing a complaint will not affect your chances of getting another job.

You can also file a complaint about the changed hours, but I’m not sure how sympathetic the Labor Department is going to be. A forty hour work week is pretty standard. In general, they want to make sure that employees get their severance. They also have to notify you in advance or pay you for the notification period. If they DO terminate you without notice, call the CLA and see if they will give you some extra time to find a job before they tell immigration your work permit has been cancelled. The CLA handles cancellation of your work permit, not the City’s Dept. of Labor.

I think you’d better start lining up another work permit right away so that you do not get a break in your residency for the APRC. Any time in Taiwan on a Visitor Visa will break your residency and reset the clock.

What you should have done was orally agree or at least not have disagreed about the new hours. Then observe them for a week or two and slowly ease back into your old schedule. Directly defying the authority of the owner with ‘legal’ arguments is a sure way to piss your employer off to the point of terminating you.

17

Well, the problem with orally accepting and then not doing it is that if we are late more than 30 minutes a month we lose half a day’s pay.

I think there’s not much I can really do until they actually try to terminate me. They haven’t sent me a letter or anything about changing the hours, so I’d really have no proof. I worry about arbitration becoming just “he said/she said”.

I was planning to contact the labor board just to let them know what was going on, so when more happens they would have a record of my earlier complaint. That doesn’t seem like the best option now I guess.

Looks like my best option is to just keep looking around for an opening somewhere else and make sure I at least get the severance out of this.

Thanks for the help.

18

[quote=“Tiare”]Well, the problem with orally accepting and then not doing it is that if we are late more than 30 minutes a month we lose half a day’s pay.
[/quote]

That’s illegal. They can dock you for time not worked, but they have to pay you for all time worked. The Labor Department will be very interested in this. Are there written work rules?

Looking for a new job and making sure you get your severance though is probably the sensible thing to do.

19

It’s also VERY common in Taiwan. So many companies here dock pay if you’re even a minute late. Normally it’s 1h of pay if you’re up to 1h late. If you have a nice boss you can get around this, but hey…

20

Yeah we have written rules. I’m working on getting the Chinese version from one of my coworkers.
Of course, there’s so many things done here that are technically not allowed, but as in most places I’ve worked, the locals won’t stand up for their rights, which makes the foreigner stick out. We have fines for not wearing name tags, fines for doing work wrong (or not finishing on time), some must work holidays without extra pay or anything, and they force us to sign amendments to the policies all the time. I’ve never been fined myself, but many of the people I work with do get fined…regularly. But no one ever does anything.

Edit: Here’s the Chinese version of the policy.

忘刷每次計10分鐘遲到，遲到累計每超過31分鐘記曠職半日（扣半日全薪）
，每累計超過121分鐘記曠職一日（扣全日薪）。