Insurance premiums, minimum wage to see increases starting Jan. 1

The China Post news staff

The China Post news staff–The minimum monthly wage will increase to NT$18,780 from NT$17,880 while the minimum hourly pay for part-time workers will be raised to NT$103 from NT$98 in Taiwan starting from Jan. 1, 2012. The wage earners’ labor insurance premium payment will also rise by an average of about NT$29 per month at the same time,

Officials at the Cabinet-level Council of Labor Affairs (CLA) reminded all workers yesterday of their rights and obligations concerning the latest adjustments of the basic wages and premium payment. Under revised regulations, the hourly wage for more than 50,000 part-time employees presently working at government departments and agencies will be increased to NT$107 from NT$102. These employees’ wages should not be lower than NT$18,780 if they draw fixed monthly incomes. All employees taking part in the national labor insurance pension system are required to pay a monthly insurance premium by the premium rate of 8 percent in 2011 based on their insured wage so that they may draw monthly pensions after retirement. The premium payment will go up by about NT$29 per month because the premium rate will be adjusted upward to 8.5 percent next month from 8 percent. The CLA estimated that as many as about 9.7 million people in Taiwan will be affected by the new change. The financial burden for employers will increase since they are required to pay 70 percent of the premium while the employees will pay for 20 percent of the sum, and the government will make up the remaining 10 percent. CLA officials explained that the labor insurance pension system launched in 2009 with a premium rate of 7.5 percent. The premium rate, which includes 1 percent of the employment insurance rate, is set for an annual increase of 0.5 percentage points until 2015 in order to improve the financial health of the insurance system and raise adequate fund to pay the monthly pensions for all of the retirees. Starting from 2016, the increase in the premium rate will be halved to 0.25 percentage point per year to raise the rate to 13 percent by 2028. Based on the average insured monthly wage of NT$28,650, every employee will have to pay NT$29 more beginning in January while employers will increase payment by NT$100 for each of their employees.

The brackets of the monthly insured labor wages will also be adjusted in accordance with the new rules in January. The sum of the employees’ insured labor wages will not only affect their insurance premium payment but also influence the amounts of the monthly annuities they will draw after retirement until they pass away, explained the CLA officials. In case a pensioner passes away not long after retirement, the survivors of his/her family will get a lump sum payment based on the retirement fund entitled to the pensioner. The government has overhauled the labor insurance program stipulated in the Labor Insurance Act and converted it into a national labor insurance pension system since employers often evade their obligations to provide such insurance for their employees in order to save costs. Under the new system, all wage earners will be able to get annuities after retirement without having to stick with the same employers in their long working careers.