If a corporation, a private company, a startup, a private school, or any other type of business goes out of business, suspends operations, declares whatever Taiwan has similar to bankruptcy, etc. and owes wages to its employees, what happens? Assuming they still have property, investments, or cash on hand, how important are wages compared to money owed to other corporations?
Labor Standards Act
Article 28
When an employer has suspended or liquidated its business or has declared bankruptcy, the following creditor rights of the workers shall be regarded equal to the creditor rights of those with mortgage rights, pledges or liens of the top priority, and the workers shall be paid in accordance with the proportion of their creditor rights; workers shall have top most priority to receive the remaining amounts owed to them:
- Less than six months of wages to be paid to the workers according to the labor contract;
- Retirement pensions that the employer has failed to disburse in accordance with the Act;
- Severance pay that the employer has failed to disburse in accordance with the Act or the Labor Pension Act.
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I’m I write in understanding that, let’s say, two months of back pay are owed, workers will be paid before other types of creditors?
iiuc, due to the above part, it doesn’t mean much.
the order may be
1 court enforcement costs
2 land value increment tax, land value tax, house tax, and business tax levied on goods by the auction of a court
3 mortgage rights, pledges or liens of the top priority, and salary
3’ mortgage rights, pledges or liens of the 2nd and below priority
4 other taxes
5 others
before the above part was added, the part you quoted give salary priority over 5 and maybe 4 after 3.
Article 28
…
Wages, pensions and severance pay owed by employers and remained unsettled after concerned workers have filed their requests shall be paid first from the Arrear Wage Payment Fund according to Paragraph 2; such employers shall then repay the amounts to the Arrear Wage Payment Fund within a specified period.
if you are covered by labour insurance, you’ll get it anyway.
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So, if a company goes out of business, labor insurance covers it? I never know that. I’ve never been completely sure what labor insurance was or if it would help with anything.
strictly speaking, it is a separated insurance, but mostly they are combined together.
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