Contract Penalties
In a previous posting I referred to contract penalties. Financial contract penalties require that if a teacher quits their school before a certain time, they will be fined by the school. Many commercial language schools in Taiwan demand the signing of contracts containing such punishments. This money is not the repayment of any sum the schools has spent training or transporting the teacher. This is not forfeit of unearned portion of salary. This is not the return of money advanced to the teacher. It is simply a penalty for quitting. Such contracts are unenforceable under Taiwan commercial law.
Contract penalties are not illegal in Taiwan, although it is doubtful if they could be enforced in a court of law. It is permissible to have a financial penalty in a contract if the employee is promised an equal bonus following the completion of the contract period. Taiwan law states that workers must receive one month pay for every year of full-time employment they complete. It is not clear to me that this constitutes the type of bonus that would make permit a contract penalty.
It has always been my policy that I will not work for someone demanding contract penalties. It indicates a lack of commitment to professionalism on the part of the employer. It is also crooked. Such contracts are not enforceable in Taiwan because anyone who would pay such a penalty does so only out of ignorance or the inability to fight.
9:09:34 AM 
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