Two documents, two promisors. An American engineer hired by a Taiwan subsidiary may sign an employment contract with the Taiwan company and, separately, accept an RSU award from the US parent. The two promises often sit with different companies, and that difference decides most of what happens when the job ends early.
Unvested RSUs on the way out
In December 2025 the Taiwan High Court ruled on an executive's promised offshore shares, holding the Taiwan employer responsible for the bonus but rejecting the damages claim; whether the case was further appealed has not been confirmed. It is discussed in Offshore Shares in a Taiwan Executive's Pay Package. The question behind it applies to any engineer holding parent-company RSUs. Who made the promise?
What gives a Taiwan court something to work with is a promise by the Taiwan entity itself: an offer letter in its name that commits to the shares, or share value booked through Taiwan payroll. That matters because Taiwan's labor rules reach the parent only indirectly. Article 37 of the Labor Incident Act presumes that what a worker receives from the employer under the employment relationship is pay for work, and the parent is usually not the employer.
Forfeiture of unvested units on termination is usually written into the US plan, not the Taiwan employment contract. The plan may also choose Delaware law or another US forum.
Taiwan companies can also grant their own equity across a group. Articles of incorporation may extend employee-compensation shares (Article 235-1(5)) and employee stock options (Article 167-2(3)) to employees of controlling or subordinate companies that meet set conditions.
What Taiwan law requires the employer to pay
There is a statutory bonus provision, but no statutory bonus amount. Article 29 of the Labor Standards Act requires a bonus or profit share, once the books close with a profit and after taxes, loss recovery, dividends and reserves, for workers who worked the whole year without fault. It names no figure and no formula. Someone who leaves in July falls outside that mandate; whether they get a pro-rated amount is a contract question.
Employee compensation (員工酬勞) under Article 235-1 of the Company Act works at the company level. Apart from state-owned enterprises, which follow a separate rule, a company must state in its articles of incorporation a fixed amount or a percentage of the year's profit for employees, after first covering any accumulated losses. The board picks shares or cash by a majority of directors present at a meeting attended by at least two-thirds of the directors, then reports to the shareholders. How much any one person receives, and what happens to people who leave, is left to the company's allocation rules and the contract.
When a bonus is legally wages
Real money rides on the classification. As a rule, wages must be paid in full and directly to the worker (Article 22), and they feed the average wage used for severance. A "must be employed on the payment date" clause that wipes out pay already earned for past work is open to challenge when the money is wages. If it is a discretionary reward, the payment conditions the company wrote are where the analysis begins.
Labels do not settle it. Article 2(3) of the Labor Standards Act defines wages as what a worker earns for work, including bonuses, allowances and "any other regular payments under any name." Article 10 of the Enforcement Rules carves out profit-sharing (紅利), year-end bonuses, contest bonuses and other non-regular bonuses from those regular payments.
In court, the Article 37 presumption does the heavy lifting. Once the worker shows that a bonus came from the Taiwan employer under the employment relationship, it is presumed to be pay for work, and the employer has to rebut that.
The average wage has its own window. It is the total wages for the six months before the event that triggers the calculation, divided by the number of days in that period (Article 2(4)). The Ministry of Labor's guidance is that inclusion turns on whether the pay was earned for work in that window, not on the payment date (MOL Q&A, in Chinese), so an annual bonus that counts as wages is not in or out of the severance figure simply because of when it was paid.
Laid off or quitting
A layoff under Article 11 (business contraction, inability to perform and similar grounds) requires notice of 10 to 30 days once service reaches three months, depending on length of service, or pay in lieu (Article 16). The severance formula then depends on which pension system covers you.
Since January 1, 2026, foreign professionals doing professional work, such as specialized or technical work under Article 46(1)(1) of the Employment Service Act, are covered by the Labor Pension Act's new system (Act for the Recruitment and Employment of Foreign Professionals, Article 24). For them, severance is half a month of average wage per year of service, capped at six months and paid within 30 days (Labor Pension Act, Article 12). Service before the switch is preserved and paid under the Labor Standards Act on termination (Article 11).
Not everyone switched. Anyone already employed at the same company before the change could elect in writing, within six months of it taking effect, to stay with the old system. Those who did, and foreign workers outside every new-system category, get one month of average wage per year under Article 17, paid within 30 days. The new system also covers, among others, a foreigner married to a Taiwan national with household registration who holds residence and works in Taiwan, and permanent residents (Labor Pension Act, Article 7).
Quitting normally means no severance, with one exception that fits an unpaid bonus. If the employer fails to pay the agreed remuneration, or breaches the contract or labor law in a way likely to harm the worker, the worker may end the contract without notice and claim severance (Article 14(1)(v)–(vi) and (4)). The clock is short. A termination on the breach ground must come within 30 days of learning of it, or within 30 days of learning of the resulting harm. More on both routes: severance after a layoff and when a resignation still earns severance.
Non-compete pay cannot be your old bonus
A clause saying your annual bonus "already includes consideration for the non-compete" does not do what it claims. Article 9-1(2) of the Labor Standards Act says reasonable compensation for a post-employment non-compete does not include anything the worker received while employed.
Compensation is only one of four conditions, and all four must be met: a legitimate business interest, a role with access to trade secrets, reasonable limits on time, area, activity and target employers, and reasonable compensation. Two years is the ceiling. The Enforcement Rules call for a lump sum paid in advance after departure or monthly payments, with compensation per month of at least 50 percent of one month's average wage at the time of departure as one benchmark (Article 7-3). The agreement must be in writing, signed by both sides, with one copy each (Article 7-1).
Staying in Taiwan to pursue the money
Whether you can stay depends on the permit you hold. An employer-sponsored work permit is revoked when the employment relationship ends (Employment Service Act, Article 73(3)). A Gold Card works differently. It combines a work permit, resident visa, resident certificate and re-entry permit, and the foreign special professional applies for it directly with the National Immigration Agency (Act for the Recruitment and Employment of Foreign Professionals, Article 9). The National Development Council's FAQ says holders may look for work, take jobs and change jobs freely while it is valid (Gold Card FAQ). The first week after a termination notice is covered in Told your Taiwan job is ending?
Tax, briefly
Article 14 of the Income Tax Act counts bonuses and employee profit-sharing (紅利) as salary income. When Taiwan taxes options and parent-company stock awards is explained in Stock options and RSUs from a foreign parent. US tax treatment is outside this article.
Where a dispute starts
With a few exceptions, labor disputes go to court-annexed labor mediation before any lawsuit, and filing suit directly is treated as a mediation request (Labor Incident Act, Article 16). Local labor bureaus also run dispute mediation. The two tracks are compared in labor mediation before a lawsuit.
What a Taiwan lawyer can handle
Before signing, the useful comparison is the US award agreement against the Taiwan offer letter, employment contract and allocation rules: what each says happens on departure, and whether the non-compete meets Article 9-1. After a layoff or resignation, the work includes a demand letter to the Taiwan entity, an opinion on whether the unpaid bonus is wages, representation at labor bureau mediation, court labor mediation and trial, and the residence questions that follow the end of a work permit. You can work with an English-speaking lawyer in Taipei; write to wei@hoveringlaw.com.tw. Hovering International Law Firm (昊鼎國際法律事務所), Taipei office: 7F-2, No. 35, Sec. 1, Chengde Rd., Datong Dist., Taipei 103 (103臺北市大同區承德路一段35號7樓之2).
For most departing engineers, the money turns on two dates in two documents: the payment date in the Taiwan allocation rules and the vesting date in the US award agreement.
Sources
Checked October 27, 2026.
- Labor Standards Act (勞動基準法), Articles 2, 9-1, 11, 14, 16, 17, 22, 29
- Enforcement Rules of the Labor Standards Act, Articles 7-1, 7-3, 10
- Ministry of Labor (勞動部), FAQ on pay for unused annual leave and the average wage (published January 11, 2017; in Chinese)
- Company Act (公司法), Articles 167-2, 235-1
- Labor Incident Act (勞動事件法), Articles 16, 37
- Employment Service Act (就業服務法), Article 73
- Act for the Recruitment and Employment of Foreign Professionals (外國專業人才延攬及僱用法), Articles 4, 9, 24; legislative history (full amendment promulgated September 24, 2025, in force January 1, 2026 by Executive Yuan order)
- Labor Pension Act (勞工退休金條例), Articles 7, 11, 12
- Income Tax Act (所得稅法), Article 14
- National Development Council, Taiwan Gold Card FAQ (Chinese)
Frequently Asked Questions
- Can a Taiwan labor court make my US parent company vest my RSUs?
- Not directly in most cases. RSUs granted by a US parent usually rest on the parent's equity plan and award agreement, often with a US governing-law and forum clause. The wage presumption in Article 37 of Taiwan's Labor Incident Act covers payments a worker receives from the employer under the employment relationship. A written promise by the Taiwan entity itself to deliver the shares, or share value run through Taiwan payroll, are the facts that open a Taiwan claim.
- Does Taiwan law guarantee a year-end bonus?
- Not a fixed one. Article 29 of the Labor Standards Act requires a bonus or profit share when the business year closes with a profit, after taxes, loss recovery, dividends and reserves, for workers who worked the whole year without fault. It sets no amount or formula. Someone who leaves mid-year falls outside that mandate, so any pro-rated amount depends on the contract or company rules.
- Is a bonus from my Taiwan employer taxed as salary in Taiwan?
- Yes. Article 14 of Taiwan's Income Tax Act lists bonuses and employee profit-sharing within salary income. When Taiwan taxes stock awards from a foreign parent is a separate question with its own timing rules.
This article provides general information and is not legal advice on any individual matter.
