Amendment to One Fixed Day off and One Flexible Rest Day Policy Leaves Allowable Overtime Hours Unsolved

20 Jan

Most of the amendments to the “one fixed day off and one flexible rest day” policy have taken effect in late 2016 and early 2017. However, many organizations are still puzzled by the policy; some think the policy has made scheduling employees’ working hours extremely inflexible. Although the Ministry of Labor has issued a letter of interpretation, explaining that the dates of the fixed day off and the flexible rest day can be negotiated, they are still collecting opinions on flexible working hours and extending overtime hours from employees and employers in order to make more informed assessment.

Since the “one fixed day off and one flexible rest day” policy came into effect in late December 216, it has caused great trouble to employers when scheduling employees’ shifts. In October 2016 when interpreting the law of a mandatory day off after six days on shift, the Ministry of Labor cancelled the regulation allowing the fixed day off to be moved to any other day in the seven-day workweek to prevent employees from working seven days without a day off.

Fixed Day off and Flexible Rest Day Become Negotiable

After the “one fixed day off and one flexible rest day” policy became effective, the non-negotiable fixed day off started to pose a serious constraint to employers. The amendment to Article 36 of the Labor Standards Act stipulates that employees should have a fixed day off every seven days. To make sure employees can enjoy their holiday, employers cannot force their employees to work on their fixed day off. The government has then added the flexible rest day to give employers more flexibility in scheduling employees’ working hours. Employers may ask their employees to work on a flexible rest day by giving a higher overtime pay. Despite the effort, the policy still added to employers’ staffing difficulties because the fixed day off could not be negotiated.

Even if a company has adopted a two-day weekend, the employees are allowed to work on Saturday but not on Sunday if the employees and employers have both agreed that Saturday is a flexible rest day and Sunday is a fixed day off. In this situation, employers cannot move employees’ shifts to Sunday.

In response to the request for clarification submitted by the Labor Affairs of Kaohsiung City Government, the Ministry of Labor issued a letter of interpretation on January 12, 2017. According to the interpretation, the fixed day off or flexible rest day can be negotiated under two conditions: employees have one fixed day off every seven days and do not work for over six consecutive days.

Employees Face Continued Difficulty in Scheduling Shifts as Allowable Overwork Hours Remain Unchanged

This is not the only dispute caused by the amendment to the Labor Standards Act. Rock Hsu, Chairman of the Chinese National Federation of Industries, has criticized the allowable overtime hours which remain at 46 hours after the enactment of the policy will lead to a lose-lose situation between employers and employees. During peak seasons, employers cannot dispatch more workforce and employees cannot earn more overtime pay. The service and manufacturing industries will suffer the greatest impact compared to the other industries.

Leading Taiwanese wafer foundry TSMC cast the first stone on January 12, saying the “one fixed day off and one flexible rest day” policy led to an increase of 0.3% in production costs, not to mention the inflexibility in scheduling shifts. TSMC Chief Financial Office Lora Ho took the company’s production line employees as an example. Working two consecutive day shifts, followed by two days off duty, these employees typically work 35 hours per week, shorter than the working hours of the employees given a two-day weekend. As the production line employees work on a shift basis and are paid for overtime when working over 35 hours, the amendment to the Labor Standards Act will cause their existing overtime hours to exceed the maximum number allowed because the amendment requires overtime between two to four hours to be calculated as four hours’ pay, and overtime between four and eight hours to be paid for eight hours’ pay. This not only puts restrictions on the company when scheduling employees’ working hours and dispatching workforce but also affects employees’ earnings. Therefore, TSMC has asked the government to extend the maximum allowable overtime hours.

CEO of Largan Precison Adam Lin said he sided with TSMC on January 13 as he believed more flexible overtime hours would benefit industries due to the influence of peak and off seasons.

Can Flexible Working Hours Solve Problems?

Whether the allowable overtime hours will be adjusted or not remains to be seen. The Ministry of Labor has recently said the Labor Standards Act allows employees to adjust their working hours in terms of two weeks, four weeks, and eight weeks. The two-week system is eligible to all industries. The four-week system is ideal for most businesses in the service industry which schedule employees’ shifts on a monthly basis. The manufacturing industry can adopt the eight-week system to solve staffing problems in high and low seasons. Currently, the government has no timetables or plans for adjusting the limit of overtime hours, but they will collect opinions from different sources before deciding whether or not to extend the allowable overtime hours.