The Wages Paid against the Paid Annual Leaves not Taken Shall Be Included as Part of the Total Monthly Salary when Calculating the Monthly Insurance Salary
If there is any paid annual leave not taken during the previous year, the employer/business entity should, at the beginning of the new year, pay wages to the employee based on the number of leave days not taken. The wage shall be included as part of the total monthly salary of the employee. An adjustment should be made to the total monthly insurance salary for labor insurance and employment insurance.
In accordance with the "Labor Standards Act", a worker who has worked continually for the same employer or business entity for a certain period of time shall be granted annual paid leaves based on the years of service completed. If a worker has unused annual paid leaves at the end of the year or due to the termination of employment, the employer should pay wages against the leaves remaining.
In accordance with the administrative interpretation letter issued by the Ministry of Labor, the wages paid by the employer against the paid annual leaves not taken shall be included as part of the total monthly insurance salary for labor insurance. If there is any change to the total monthly salary of the insured due to the payment of wage against the paid annual leaves not taken, the insured unit should incorporate the amount into the monthly insurance salary of labor insurance for the current month.
The BLI explained that, the amount of the monthly insurance salary for the labor (employment) insurance is determined based on the definition of wage provided in Article 2, Subparagraph 3 of the "Labor Standards Act", being the remuneration received by a worker for his/her services rendered, including wages, salaries and bonuses, allowances and any other regular payments regardless of the name. The insured units should accurately report the monthly insurance salary based on the total monthly salary of its employees and in accordance with the "Table of Grades of Labor Insurance Salary". Insured units that fail to report accurately shall be, in accordance with Article 72, Paragraph 3 of the "Labor Insurance Act” and Article 38, Paragraph 3 of the "Employment Insurance Act", subject to a fine of four times the overstated or understated premium amount from the onset of the violation shall be imposed.
As a gentle reminder, BLI reiterated that the monthly insurance salary was the basis for calculating various benefit payments for labor (employment) insurance. Employers/business units should file accurate reports based on the total monthly salary of the employees to safeguard their rights and interests and avoid penalty.