Proposed law seeking to ensure payroll comes first
A proposed law seeks to demand that financially troubled employers prioritize salary payments before they pay out to other creditors.
The Judicial Yuan ( ) said yesterday it has drafted amendments to the Consumer Debt Clearance Act (
), formerly the Bankruptcy Code ( ). The proposals come into effect if approved by the Legislative Yuan.
One draft amendment stipulates that employers pay out to their employees first, before all other creditors, during the six months before entering insolvency proceedings.
A second proposal allows up to a seven-year prison sentence if bankruptcy filers conceal or destroy evidence of assets.
The Judicial Yuan approved a clause that requires debtors to restrict daily expenses to the standard cost of living, and another that allows courts to limit debtors’ right to leave the country during bankruptcy proceedings.
Another proposal enables Taiwan courts to recognize the bankruptcy proceedings of courts in mainland China, Hong Kong and Macau.
If the draft is approved, Taiwanese business owners that file for bankruptcy in China can apply for status recognition back home, which would allow them to liquidate Taiwan assets.
The draft amendments will be submitted to the Executive Yuan for approval and then to the Legislative Yuan for review.