Maximum insured pay for labor insurance to rise to NT$45,800

This article was published by the Taiwan Headlines on April 20, 2006. It reports that the government recently announced its plan to raise the maximum insured pay for the labor insurance program to NT$45,800, up NT$3,800 from the current level. The increase will take effect on May 1, 2006.

According to this article, the increase is expected to bring an addition burden to Taiwan's employers for their labor-insurance premium payment, which currently amounts to NT$3 billion per year. Due to such extra burden, employers are expected to become more conservative in pay raise in 2006.

The maximum insured pay for labor insurance has remained unchanged at the current level of NT$42,000 for the past eight years. Now, the adjustment plan submitted by the Council of Labor Affairs will need to be ratified by the Executive Yuan before it can take effect.

According to the adjustment plan, various compensations for labor insurance are calculated on the basis of the insured pays, including compensations for birth, injury and illness, death, and retirement. The compensations will be raised along with the increase of the insured pays.

Statistics show that at the end of 2005, there were 1.6 million laborers with the maximum insured pay of NT$42,000. These accounted for 18.79 percent of Taiwan's total insured labor force. After the adjustment, about 1.31 million laborers around the nation will see their insured pay increase to NT$45,800. Another 140,000 laborers will also see their insured pay rise to NT$43,900. The adjustment will dramatically increase the personnel costs of Taiwan's businesses, because employers have to bear 70 percent of the labor-insurance premiums for their employees.

According to this article, as inflationary pressure continues to build up along with the increase of international oil prices, many domestic businesses are now struggling to handle higher operational costs. Together with the new labor pension program implemented in 2005, the adjustment of the insured pay for labor insurance will make Taiwan's employers even more conservative in raising the salaries of their employees.

However, according to this article, insured pays for the national health insurance program generally correspond with the insured pay for labor insurance. As the result, laborers will also have to pay more premiums for their health insurance in the future.