When working in Taiwan, understanding your employment contract can help protect your rights. As an OFW, you’ll typically fall under one of two categories: fixed-term or indefinite-term contracts. Here’s how these contracts differ – and why it matters.
Nature and Duration
Fixed-Term Contracts
- These have a set start and end date.
- Common for short-term, seasonal, or project-based work.
- Examples: 6-month temp jobs or 9-month seasonal roles.
- Longer durations need special approval from labor authorities.
- Once the contract ends, your employment ends automatically—unless renewed.
Indefinite-Term Contracts
- No end date; work continues until either party ends the agreement legally.
- Used for regular, ongoing jobs.
- Offers more stability and is the preferred format for long-term employment under Taiwan’s Labor Standards Act.
Legal Guidelines
For Employers
- The law favors indefinite-term contracts for regular jobs.
- Misusing fixed-term contracts to avoid obligations may result in penalties or forced reclassification.
For Employees
- Both contract types must include job details like duties, location, working hours, salary, and leave.
- However, termination rules and benefits vary depending on the type.
Termination Procedures: Fixed vs Indefinite Contract in Taiwan
Indefinite-Term Contracts
If the Employer Terminates:
- Must have a valid legal reason under the Labor Standards Act.
- Requires advance notice (usually 30 days) or pay in lieu of notice.
- Must provide severance pay based on years of service.
If the Employee Resigns:
- Prior notice is usually required.
- You may be entitled to severance if the employer violated terms (e.g., unpaid wages or unsafe working conditions).
Important: Improper termination may lead to legal disputes or penalties.
Fixed-Term Contracts
Natural End:
- Ends automatically on the agreed date.
- No need for notice or severance if it ends as scheduled.
Early Termination:
- Mutual agreement can allow for early cancellation.
- Just cause (like misconduct) may also justify early exit.
- Without valid reason, early termination may require compensation to the affected party.
Legal Note: If your fixed-term contract is renewed repeatedly for the same job, it may be reclassified as indefinite by authorities—giving you added rights.
Which Contract Is Better for OFWs?
| Criteria | Fixed-Term Contract | Indefinite-Term Contract |
| Job Duration | Set end date | Ongoing with no end date |
| Employment Stability | Low – temporary work | High – more stable |
| Severance Requirement | Usually not required | Required if terminated by employer |
| Renewal Risk | May be misused for permanent roles | Compliant for continuous work |
| Termination Flexibility | Less formal if ending on expiry | Formal procedures required |
Speaking from experience, the kind of contract you accept can shape your entire stay in Taiwan. I started with a fixed-term contract, thinking it would give me flexibility, but the uncertainty weighed on me more than I expected. Every renewal felt like a countdown. When I finally transitioned to an indefinite-term role, it wasn’t just about the paycheck. It gave me space to plan, breathe, and grow roots in a place that was once unfamiliar. If you’re here for the long haul, having that security can really change how you live – not just how you work.
What OFWs Should Watch Out for When Signing a Taiwan Contract
As OFWs, we often rely on agencies to walk us through the hiring process—but that doesn’t always mean we understand every clause in our contract. Here’s what I’ve learned to look out for before signing anything:
- Is the contract written in English or Chinese? Always ask for an English copy and make sure the terms match across languages. Miscommunication here can lead to serious misunderstandings later.
- Does it clearly state “fixed-term” or “indefinite”? Some OFWs are surprised to learn their contract ends after a year—thinking it was a permanent role.
- Check the details on overtime, leave, and renewal. Does it say anything about rest days or holidays? How is overtime calculated? Will you be automatically renewed or renegotiated after the contract ends?
Remember, even if the agency is assisting you, it’s your name on that paper. Ask questions. You’re not being difficult—you’re protecting your future.
2012-Taiwan-ETC_TW_excerptKey Takeaways
- Fixed-term contracts are ideal for short-term or seasonal roles, but may offer less protection.
- Indefinite-term contracts are better for long-term job stability and benefits.
- Misusing fixed-term contracts for ongoing roles can trigger legal action in favor of the worker.
- As an OFW in Taiwan, knowing your contract type helps you understand your rights, prepare for job changes, and advocate for fair treatment.
Employer of Record (EOR)
You might have seen job listings from companies that offer to hire OFWs without needing a local Taiwan branch. This is often made possible by what’s called an Employer of Record (EOR)—a third-party company that legally hires you on behalf of the employer.
Why does this matter for OFWs?
- It opens doors to global roles: Some tech and admin jobs for Filipinos in Taiwan are now available through EOR platforms. This means more flexible work setups and even remote hybrid roles.
- Contracts under EORs are usually fixed-term: These arrangements are great if you’re testing the waters or want short-term work—but double-check how renewals or early termination are handled.
- They take care of legal compliance: Legitimate EORs like Skuad ensure your wages, benefits, and leave entitlements comply with Taiwan’s labor laws. That’s peace of mind if you’re working for a foreign company locally.
If you ever get an offer through an EOR, ask to see the terms of both your employment contract and the EOR agreement. And don’t forget to confirm your labor insurance coverage—especially if you’ll be doing in-person or field-based work.
Frequently Asked Questions
Can my fixed-term contract become indefinite?
Yes. If you’re doing continuous work under repeated short contracts, it can be legally reclassified as indefinite.
Do I get severance pay with a fixed-term contract?
Only if the contract is ended early without valid reason. If it ends naturally, no severance is needed.
Which is better for job security?
Indefinite-term contracts offer more protection, stability, and benefits under the law.
Conclusion
Whether you’re signing your first contract or considering a renewal, understanding the fixed vs. indefinite contract in Taiwan can make a big difference in your job experience as an OFW. Knowing your rights, your employer’s obligations, and the legal framework gives you the power to make informed choices and avoid surprises down the road. In the end, the best contract is the one that matches your goals, protects your welfare, and supports your journey abroad with peace of mind.