There are many micro-enterprises employing less than 5 employees in Taiwan. Given they are not subject to compulsory inclusion of labor insurance, these employers, in most cases, do not provide labor insurance for their employees. In addition, there are workers who are unwilling to be insured by their employers because of their debts, so as to prevent their creditors from petitioning to courts to enforce creditors’ claims against their wages.
Given the workers are not covered under the labor insurance scheme, both the employers and workers are not required to pay additional labor insurance premiums. On the surface, it seems like a "win-win". However, in the event of an occupational accident, such an arrangement is very likely to lead to a “lose-lose” situation. Not only the families of the workers in the occupational accidents could be broken due to the sudden losses of their financial supports, but the micro-enterprise employers may also face huge claim amounts which might turn into an insolvency status.
These cases are most common in the manufacturing and construction industries. However, these happen to be the industries in which occupational accidents occur the most. According to the statistics from the Ministry of Labor on occupational accident insurance benefits payment, the manufacturing and construction industries have been the top two industry for occupational accidents insurance benefits payment (excluding traffic occupational accidents insurance benefits payment) for workers for many years, with more than 13,000 persons being paid occupational accident insurance benefits every year, which account for more than half of the total number of payees for occupational accident benefits. These statistics only account for those who have occupational accident insurance, and do not include the circumstances where the workers are not insured in an occupational accident insurance.
The "Labor Occupational Accident Insurance and Protection Act,” which takes effect on May 1st, 2022, expands the scope of those who are required to be covered. As long as a worker is employed by a registered business entity here in Taiwan, regardless of the scale of said business entity, the worker will be required to be insured for occupational accident insurance. Workers who do not have a regular employer or are self-employed and are members of professional unions are subject to have occupational accident insurance as well. Workers shall be insured on the day they check in for new jobs or join union memberships. If an employer fails to insure their employees, they are subject to fines with no less than NT$20,000 but no more than NT$100,000.
If an employer fails to enroll a worker in labor insurance, and, unfortunately, the worker suffers an occupational accident. Under that circumstance, the worker may be still covered by occupational accident insurance, and the date of coverage accrues from the first day at work, regardless of whether the employer applied for this labor insurance for the worker. In such case, besides the monetary loss for the employer, the competent government authority may publish the names of the violating business entities, the names of the responsible persons, and the dates of the penalties. In this regard, the local Taiwan businesses should be aware of such negative consequences that might affect the business’ reputation.
Once an occupational accident unfortunately occurs, in addition to claiming occupational accident insurance benefits, a worker may also claim against an employer for occupational accident compensation provided under Article 59 of the Labor Standards Act (including but not limited to medical expenses, wage loss, disability compensation, death compensation), or damages based on torts or non-performance of contractual obligations as provided under the Taiwan Civil Code. Regardless of whether the employer was at fault, the employer should be held liable for compensation for the occupational accident. Even if the occupational accident is caused by the fault of the worker (for example, a worker fell from the scaffolding without using the safety wire, the worker’s arm was caught in a machine due to unauthorization, or his arm was drawn into the machine by clipping the safety device), the employer may be hard to exclude from compensation liability. As one may observe, Taiwan law imposes high duties on the employers regarding occupational accidents.
Whether you are an employer or a worker, no one would like to see occupational accidents occur. In many cases, occupational accidents occur not because of the conditions of safety and sanitation at the workplaces as provided by the employers and/or may not be fully controlled by the employers, i.e., traffic accidents during the workers’ daily commute. The companies should, at least, implement the mandated social insurance system into its business operation. In addition to the protection of the rights and interests of workers in occupational accidents, the insurance payouts could further be used to offset the employer’s compensation amount in torts claims. More, they could be used to reduce the likely impacts on business’ daily operations if an accident occurs.
Based on my experiences, even if the payouts of the insurance may be used to offset the compensation amount, in practice, employers may still be held liable for occupational accident compensation claims by workers. In addition to occupational accident insurance, businesses could minimize and transfer risks in advance by purchasing commercial insurances for workers such as group accident insurance, construction site liability insurance, or employer liability insurance. In the event of any unfortunate occupational accident, such insurances may be entitled workers to receive insurance benefits sooner, and may avoid the breakdown of employer-employee bilateral relationship after occupational accidents.
In judicial practices, it is believed that the purpose of purchase of commercial insurance for workers is to enable such commercial insurance may transfer employers’  legal and business risks so that workers may receive an enough amount of compensation from the insurer. In this regard, such insurance payout may be used to offset against the amount that the employer shall pay to the prevailing employee. It not only may release the employer’s duty to protect workers in a working environment, but also transfers the risks arising out of occupational accidents effectively. It, therefore, creates a win-win situation.

(This article was published in the Expert’s Commentary Column of the Commercial Times：https://view.ctee.com.tw/tax/38884.html）

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