8.I have participated in the labor insurance program. Does this warrant my eligibility for claiming the overdue wages payment? What is the maximum period of the coverage? Is the claim amount calculated based on the actual salary or the labor insurance insured salary?
- Claims for wage arrears payment can only be filed by “workers” defined in the Labor Standards Act., i.e., workers who are hired by the employer and receiving wages for their services. The responsible person or other individuals keeping a mandate relationship with the company are not reckoned as “workers” under the Labor Standards Act and therefore not entitled to claim for the wage arrears payment , notwithstanding their enrollment in the labor insurance.
- The payment shall cover the following unpaid claims due from the close-down, liquidation or declaration of bankruptcy by the business entity.
①. Less than six months of wages to be paid to the workers according to the labor contract.
②. Retirement pensions or severance pays that the employer has failed to disburse in accordance with the Labor Standards Act, or severance pay that the employer has failed to disburse in accordance with the Labor Pension Act. The total amount shall be no more than six months of average wage.
- According to the Labor Standards Act, “wages” refer to all the compensation received by a worker for his/her services rendered. The wage arrears payment , therefore, shall be calculated based on the actually wage amount. The retirement pension base of the Labor Standards Act shall be one month’s average wage of the worker at the time when his or her retirement is approved. The severance pay base of the Labor Standards Act and Labor Pension Act shall be one month’s average wage of the worker. In addition, according to the Article 2 of the Labor Standards Act, average wage means the figure reached by taking the total wages for the six months preceding the day on which an event requiring that a computation be made occurs, divided by the total number of days in that period. In the case of a period of service not exceeding six months, the term "average wage" means the figure reached by taking the total wages for the service period divided by the total number of days of that period. In the case of wages which are computed on a daily, hourly, or piecework basis, if the "average wage" figure reached according to the preceding formula is less than sixty percent of a figure determined by dividing the total wages for the particular service period by the actual number of work days, the "average wage" in this case shall be the sixty percent figure.