Regulations on Severance Pay

(一) Old Scheme

　When an employer terminates a labor contract pursuant to Article 11, the conditional proviso of Article 13, or an employee terminates a contract pursuant to Article 14, the employer shall make severance pay to worker in accordance with the terms set forth in Article 17:

1. A worker who has continuously worked for a business entity owned by the same employer shall be entitled to severance payment equal to one month of average wage for each year of service.
2. Severance payment shall be paid in proportion to months of service not comprising a full year. Any fraction of one month shall be deemed to be one month.

(二) New Scheme

　　For those employees who are subject to the pension mechanism of Labor Pension Act (new scheme) when their labor contracts are terminated in accordance with Article 11, the conditional proviso of Article 13, Article 14 and Article 20 of the Labor Standards Act or Article 23 and Article 24 of the Occupational Accident Labor Protection Act, their employers shall make severance pay which is calculated based on the seniority:

1. Half monthly average wage for each year of service after the enforcement of this Act. The severance pay for a period of service of less than one year shall be calculated proportionately. The total severance pay shall not exceed six monthly average wages. Article 17 of the Labor Standards Act shall not apply.
2. The severance pay calculated based on the preceding paragraph shall be paid within 30 days after the termination of the labor contracts.
3. For those employees who choose to be subject to the pension mechanism under the Labor Standards Act, their severance pay shall be calculated in accordance with Article 17 of the Labor Standards Act.