Ministry of Labor: Employers Cannot Demand Full Repayment of Minimum Service Period Compensation

(Central News Agency, Taipei, 5th) Many employers sign minimum service period agreements with their workers. The Ministry of Labor stated today that employers cannot use on-the-job training or legally required training as reasons to sign a minimum service period agreement. If a worker resigns early, the amount the employer demands for repayment must be calculated proportionally.

The Ministry of Labor held a routine business report. Wang Hou-wei, Director of the Department of Labor Relations, stated that employers in many industries combine minimum service periods with penalty clauses, requiring workers to stay with the company for a certain period without changing jobs. If they resign early, workers must bear high compensation costs.

Wang Hou-wei stated that for an employer and worker to sign a minimum service period agreement, one of two legal conditions must be met: the employer must "provide professional technical training and bear the costs" or "provide reasonable compensation." A common example of the former is pilots, where many employers cover training costs. The latter is common in the tech industry when poaching employees with technical certifications.

However, Wang Hou-wei noted that there have been some controversial cases regarding minimum service period agreements in practice, so an official letter was issued today to clarify the relevant regulations.

Wang Hou-wei reminded that employers cannot use costs from routine internal educational training, general on-the-job training, new employee job familiarization training, or legally mandated training as a basis for signing a minimum service period agreement with workers, nor can they use these as reasons to claim penalties or demand repayment.

Wang Hou-wei said that if an employer uses retention bonuses, signing bonuses, or other advance payments as reasonable compensation for a minimum service period agreement, they must clearly inform the worker. If a worker resigns before the agreed period ends, the amount the employer demands for repayment must be calculated proportionally based on the unserved service period; full repayment cannot be demanded.

Wang Hou-wei pointed out that if labor and management have disputes over minimum service periods, penalties, or the repayment of retention bonuses, they can submit specific evidence to the local labor administrative authority for mediation. (Editor: Guan Zhongwei) 1150605