(FWA 2025/11/11)The Ministry of Labor (MOL) reminds employers that if they must terminate a labor contract due to reasons such as business closure, operational losses, business restructuring, or an employee’s inability to perform duties following an occupational accident, they must pay severance. This payment must be made within 30 days of the contract termination. Failure to pay within the deadline will result in a fine of NT$300,000 to NT$1,500,000.

70 Violations Last Year Resulted in NT$18.05 Million in Fines

According to MOL statistics, there were 70 violation cases in 2024, resulting in NT$18.05 million in fines. As of November 6, 2025, there have already been 54 violations, with total fines amounting to NT$13.55 million.

An MOL official explained that the new Labor Pension system, implemented on July 1, 2005, has now been in place for 20 years (as of 2025). According to Article 12 of the Labor Pension Act (new system), the severance pay standard for workers under this system is calculated based on their years of service: half a month’s average wage for each full year worked. For periods less than a year, the payment is prorated. The maximum severance pay is limited to 6 months of average wages.

Employers who fail to pay according to the standard or within the deadline will be fined NT$300,000 to NT$1,500,000, as stipulated in Article 45-1 of the same act. They will also be ordered to make the payment by a new deadline; failure to comply will result in consecutive penalties.

Fined for Underpaying Severance; MOL Provides Calculator

Common violations by employers include: failing to pay severance within 30 days of contract termination, failing to pay severance to employees on probation whose contracts are terminated early, and underpaying severance. In one case, a company that was supposed to pay NT$4,053 in severance only paid a rounded-down amount of NT$4,000. All such cases will be subject to fines ranging from NT$300,000 to NT$1,500,000.

To assist with calculations, the MOL has set up a severance pay calculator (https://calcr2.mol.gov.tw/SeverancePay) for public use.