Getting Fired Severance Pay LSA vs LPA

My company is downsizing with about half of the employees getting canned before CNY amongst which is myself. The HR told me they would formally fire me tomorrow and give me the papers to sign at which stage I’m free to leave.

I would just like to get as well educated on the laws as quick as possible before I sign anything. In short I am a foreigner on a work ARC. Been working in Taiwan 4+ years on work ARCs and at this company now 2 years + 1 month.

How much severance pay am I entitled to? I know that most Taiwanese are now enrolled in the Labor Pension Act (LPA) which gives them a bunch of other benefits but only half severance pay, but it’s my understanding and from seeing my salary slip that as I am a foreigner on a work ARC I do not build up a pension. At least until I get an APRC. Does this mean my severance is calculated according to the Labor Standards Act (LSA). Which is 1 months pay for each year of service.

Please can someone post some links to where the official laws are posted. I have been searching the internet but to no avail. Preferably English but Chinese is fine too. Thanks in advance!

I don’t have much time to search specific laws now, but ministry of labor governs labor related things. Chinese sites have more info.

English site


Bureau of Labor Insurance


Just make sure that you get an extention at NIA for your ARC. You are entitled to at least 6 months as per the new law. This way, you will not lose the 4 years of work you already have and you will only get to work one more year before you can apply for an APRC.

Thanks for pointing me in the right direction. After about an hour of searching I think I found the English and Chinese version of the LSA here

This lists the laws and regulations. Things to note is as I have worked more than 1 but less than 3 years they have to give me notice of 20 days. The HR lady said they would pay up to the notice period and it’s up to me if I want to come in or not. So I guess the contract termination will be in 20 days time.

As a foreigner on only an ARC there is no way that I could opt-in for the labor pension act right? I just want somehow to prove in Chinese that my work regulations are according to the labor standards act.

Also I have accumulated 11 vacation days for this year, but how many are they entitled to pay out. 1/6 of them? As I will only be at the company for 2 months this year. Let’s see. I am sure it will be an interesting conversation tomorrow.

Thanks Icon, I am aware of the extension. As soon as I receive the contract termination certificate I will be going to immigration with a letter for extension. My first ARC was issued July 2013 so technically with the 6-month extension I could apply for APRC without having to work but I am sure I will find work before then.

iirc, you should be paid for 11days.

If you have been deducted labor insurance fee, you nigh be eligible for unemployment fee. If you have a time you could check Bureau of Labor Insurance site.

labor pension, maybe no.

@yyy knows more.

Labor insurance (laobao) only covers pregnancy/childbirth, injury/illness/disability, death of the worker or certain family members, and retirement, so it doesn’t apply in a case like this.

Employment insurance (jiubao) covers unemployment in general.

To make things more confusing, the Bureau of Labor Insurance deals with both. :doh:

Labor Pension Act Art. 7:

Ergo the Labor Pension Act (aka the “new system”) does not apply (for now) to foreigners who have never had Taiwanese spouses. Without the LPA, there is nothing to stop the LSA (aka the “old system”) from applying, unless your job is one of the rare ones that was never subject to the LSA in the first place. If you have any doubt about whether or not the LSA applies to you, ask your local labor department or the Ministry of Labor.

EIA Art. 5:

Ergo there is no employment insurance for unmarried foreigners at this time.

at this company now 2 years + 1 month.

Under the LSA, your seniority (年資) is always rounded up to the next month, and each month is worth 1/12 of a month’s salary, so your severance pay should be just over 2 months.

If you have a fixed monthly salary and have not had any change in it for the last six months (counting back from the day on which termination occurs), your “average wage” is simply your monthly salary. :slight_smile:

If you have had a change in the last six months, you need to get out the calculator and possibly note the official interpretations that are only available in Chinese at (not the MOJ’s site).

Also, under Art. 2 of the LSA, “wage” may include items that are not listed as wage/salary, such as transportation allowance, meal allowance etc. A bonus can also be included as “wage” if it’s of a regular or predetermined nature (except for the standard end of year bonus). The idea is that they’re not allowed to lower your average wage with creative accounting.

as I have worked more than 1 but less than 3 years they have to give me notice of 20 days. The HR lady said they would pay up to the notice period and it’s up to me if I want to come in or not. So I guess the contract termination will be in 20 days time.

Do you love your job so much that you want to do it for free and lose the tax-free status of your termination pay? :astonished:

They’re supposed to give notice of the termination 20 days in advance, but if they terminate the contract with less than the minimum notice period, they still need to pay your salary for that period, and if they give you pay in lieu of notice (“termination pay” as it’s sometimes called), that amount gets added to your severance pay as what the National Taxation Bureau calls “separation income”, which is tax-free. :rainbow: There’s an official interpretation for this somewhere, but iirc it should be on the MOF’s site and not the MOL’s.

So, if you don’t love your job that much, ask them to terminate the contract immediately (stating the current date on the termination letter).

There are also some special rules for mass layoffs, but I’ve never looked at them in detail, so I don’t know if there’s anything in there for you.

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For those that do qualify for LPA because they do have or had a Taiwanese spouse, how does the severance pay calculation differ from the LSA? If you know off hand, I would be interested to know.

Also, is a married or previously married foreigners able to choose between the LPA and LSA, or are they only given the LPA option?

It’s basically 50% of LSA severance, with the same rules for calculating the average wage but iirc a different rule for rounding and a maximum degree of seniority.

I don’t think you get a choice, but I would have to read it again…

I did just find this:

Article 16 The unemployment benefits shall be 60% of an applicant’s average insured monthly salary in the six-month period right before employment separation and withdrawal from this insurance program, paid for up to six months.

As I understand, I thought LSA was a lump sum payment based to the calculation you have above. LPA appears to be different and paid monthly up to six months or when the applicant gains employment again. Perhaps I’m misunderstanding.

That’s the Employment Insurance Act.

Severance is a lump sum whether it’s LSA or LPA, not to be confused with a pension in either system.


Sorry for the confusion, I understand and thanks for your help in understanding the complexities here. I assumed severance went away in the LPA, replaced by the benefit I listed above, because I can’t find reference to the actual severance benefit. Admittedly, I’m likely looking in the wrong place.

Need to clarify this, are you getting fired or laid off?

Make sure the details are clearly written, you don’t want to be suddenly disciplined and fired for not coming in during those 20 days!

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LPA Art. 12:

Tl/dr: severance arises from the same situations as in the LSA.

Also, it seems the right to choose which system you want only exists if you’ve been with the same employer since 2013, according to Art. 8-1:


I heard the choose thing was an option, but sort of dismissed it. Thanks for finding this! Sorry OP for mucking up your thread.

Thank you all for pitching in and a special thanks to yyy for such a detailed reply with all of the links. I am sure this will be useful for other people down the line in similar situations. In this case I believe I was being laid off, as more than 50% of the workforce of our company were let go this week. From 30 people to about 10.

It was quite an odd day but I have taken the papers to look over one last time with the help of a native to confirm everything. Basically everything yyy said was true and now the severance pay is being calculated according to one month per year worked. Also the 11 vacation days are being paid out in full. Also the 20 day notice period is being paid in full, with me not having to come to the office, all the termination papers and work permit termination is dated today.

The odd part was that in the morning I decided to confirm everything one final time. After being redirected to a few departments I reached the New Taipei City Government Labor Affairs Bureau (新北市政府勞工局). There I spoke to the lady who mentioned the same regarding severance.

However as I kind of expected when first shown the severance agreement it mentioned only half a months pay per year worked. They said they had called themselves and this was what the same labor office told them. Then while in the room together, we called for a third time the same bureau, each time being connected to a different person. This time the man wasn’t a lawyer and didn’t sound too confident but he advised that the company should adhere to the new rules and I was only entitled to half a months pay per year worked. I said he didn’t sound too sure and I asked the company to check if I had received any pension payments or been enrolled for employment insurance.

Then after further checking with multiple departments they could confirm as I was a foreigner I was not eligible for employment insurance but had been receiving pension payments somehow. I urged them to call the labor office again. So the fourth time we call the same number, there was a gentleman who then sided with the law that I was eligible for 1 month per year worked severance and the pension payments were illegal and they should sort it out.

Still confused I left the office but the HR later informed me that she contacted a specialised labour lawyer to get to the truth and they finally sided with the one month per year worked. So I will be accepting this severance now and signing all the papers tomorrow and then getting the ARC extension.

In this situation although my one time severance pay is better, the LPA appears to be more beneficial in terms of offering employment insurance and pension payments. Oh well just have to wait until I get married in a few months, but let’s hope I will not be going through this any time soon.


Thanks for letting us know how it turned out. :slight_smile:


Now this is pathetic. The New Taipei labor department is supposed to be foreigner-friendly. They even provide service in Southeast Asian languages! I guarantee they have faced this issue before.

Some people just pretend not to know the rules. Some people are just incompetent. Some people are both. It’s so hard to tell who’s what! :roll_eyes: