Protection of Interests of Employment

To ensure protection of employees’ interest, LITE-ON set up all of the relevant policies in accordance with the regulations and laws:

Lawful hiring practices

LITE-ON complies strictly with employment regulations by prohibiting the use of child labor aged below 15; meanwhile, employees aged below 18 are not allowed to perform dangerous work. All changes to terms of employment have been duly notified as required by law.

Fair performance assessment

LITE-ON designs performance management with the aim to improve performance of individual employees and the organization as a whole. The company has instituted two-way communication and implemented an employee development plan. Performance assessments are fair and reasonable, so that assessment results can provide a basis for promotion, salary increments, remuneration, and employee training. If an employee is not competent to perform his or her work, LITE-ON will provide counseling or transfer the employee to a suitable position or affiliated enterprise. If the employee still fails to fulfill the terms of the employer-employee relationship, the company will give the appropriate notice* and terminate the employee's contract with severance pay in accordance with relevant laws and regulations. The company will also provide relevant proof and documents required by law in order to facilitate the application for unemployment benefits or professional training grants for the employee and to protect the employee's employment rights.
The minimum notice periods for plants in Taiwan governed by the Labor Standards Act are as follows:

1. Those who have been in employment for three months or more but less than one year should be given a ten-day notice.

2. Those who have been in employment for one year or more but less than three years should be given a twenty-day notice.

3. Those who have been in employment for three years or more should be given a thirty-day notice.

Executive managers

In order to strengthen corporate governance, the performance indicators of executive managers were revised as shown in the table below after the Compensation Committee resolution approved by the Board of Directors in 2020.

Performance review of indirect labor

Performance review of direct labor
There is a direct link between performance of direct labor and the company's production performance. Therefore, for those in direct labor, the plants follow a monthly bonus system based on product characteristics. Employees are rewarded according to performance. Employees' overall performance will be scored in the annual performance review at the end of each year.

New hire review
When a new employee reaches the end of his/her trial period, the manager should conduct an interview and assessment regarding the employee's performance during the trial period. For those who fail to pass the review, the company may terminate the employment contract as permitted by law or, by mutual consent, extend the trial period. The extension should not exceed the original trial period.

Guaranteed Salary

LITE-ON places particular emphasis on how employees are compensated for their services. Regardless of where the company operates, it offers competitive compensation packages and conducts salary surveys each year to align salary levels with the current market and with the various economic indicators used in the analysis. As a means of attracting top talents, LITE-ON offers some of the best starting salary packages for new hires. Employees' salaries and compensation are determined by their education, knowledge, skills, seniority, and individual performance. In no way does gender play a part in these decisions. New employees are not given different starting salaries on the basis of their race, religion, political views, gender, marital status, or union association. The company's compensation policy has been drafted on the basis of the following principles:

• LITE-ON is aware of and complies with relevant local laws and regulations, strives to establish harmonious employer-employee relations within the scope of the law, and thereby promotes sustainable management.

• In order to maintain competitiveness in the employment market, pay is set and adjusted in reflection of manpower supply and demand and the profitability of product lines.

• In order to incentivize employees, the company strives to pay appropriate salaries reflecting the market value of professional functions, the contributions of employee, and the results of the performance management system.

• Starting salaries offered to direct labor not only have to comply with local regulations, but are also competitive when compared to industry peers. Currently, LITE-ON's starting salary for direct labor is approximately 1.03 times the minimum wage in Taiwan, 1 time in Mainland China, 1 time in Thailand, and 1.7 time in Vietnam.

• Periodically review salary levels related systems to have better salaries in the market.

• As an added incentive to employees, LITE-ON pays a performance bonus each year depending on how each individual and the company has performed. The amount of bonus granted to employees is determined by their responsibilities, contributions, and performance.

The worldwide base gender pay gaps ratio by pay grade are shown in the table below: (= average female salary / average male salary)

LITE-ON's all operational sites worldwide protect the rights and interest of the employees according to the local laws and regulations. Taking sites in Taiwan as an example, according to regulations in Taiwan, all employees need to be insured under the Labor Insurance and National Health Insurance schemes from their onboard date, and have contributions made to pension funds. In addition to mandatory coverage, the company provides group insurance policies that offer better medical protection and cover: life, accidental death, hospitalization, cancer, and emergency medical treatment. Employees may choose to include their spouse/children/parents in the coverage at additional cost. Furthermore, the company offers even broader group insurance coverage for out-stationed employees, giving them the peace of mind when working overseas. Compensation for overseas employees has been set at reasonable and competitive levels depending on local market conditions. Meanwhile, long-term and short-term bonuses are also offered as added incentives according to local regulations and industry practices. Overseas employees are covered by social insurance schemes as required by local regulations.

Pension Scheme

LITE-ON makes contributions to employees' pension funds according to local regulations, regardless of where it operates in the world. Today, 100% of its employees have joined a pension plan. In Taiwan, the pension policy complies with the Labor Standards Act where contributions are made regularly to employees' pension accounts; in China, employees are insured according to local regulations in order to secure a comfortable lifestyle after retirement.

In Taiwan, employees' pension schemes are governed either by the Labor Standards Act (the old scheme) or the Labor Pension Act (the new scheme) of the Republic of China. Employees who came onboard on or before June 30, 2005, are entitled to carry forward their years of service from the old scheme to the new scheme. Under the old scheme, the company contributes 2% of employees' monthly salaries into a pension account held with the Central Trust of China. This reserve has accumulated to NTD1.05 billion to date, and is fully funded to provide for employees' retirement needs. Under the new scheme, the company contributes 6% of employees' monthly salaries into their personal pension accounts. In addition to the monthly 6% contributions made by the employer, employees may also choose to contribute another 0%~6% of their salaries into their pension accounts.

Employee Relations

To facilitate cordial labor management relations, LITE-ON takes an active approach to listening to its employees and making a range of two-way communication channels available. Regular department meetings and a strictly confidential complaint channel form a comprehensive communication platform that ensures instant, transparent, and undisrupted communication between the company and its employees and protects the rights of each and every employee.

Intranets

To ensure all employees have instant access to and knowledge of the company and the Employee Welfare Committee, LITE-ON has created the "HR Portal" and the "LITE-ON Homestead". The "HR Portal" provides complete details on the company's rules and regulations as well as important announcements in order to enable employees to receive important information from the company in a timely manner. Meanwhile, the LITE-ON Homestead provides information on the benefits and subsidies offered by the Employee Welfare Committee in the current year as well as the rules and other special offers. The platform informs employees of the rights and benefits to which they are entitled. In addition, the LITE-ON Homestead contains an "Opinion Mailbox" that accepts suggestions and questions from employees and provides the necessary assistance and answers.

Two-way communication meeting

Every business unit at LITE-ON is required to conduct monthly management meetings and organize two-way communication meetings with employees on a regular basis. In addition to facilitating announcements of important news and business targets from the business units, these meetings enable management to communicate directly with employees regarding the company's vision and culture and hence develop common goals. Employees may also use this opportunity to provide feedback and suggestions, and hence maintain good employee relations. Furthermore, LITE-ON invites suggestions from employees, and presents said suggestions regularly in employer-employee meetings and to the union in order to improve employer-employee relations and protect employee rights.

Sexual harassment prevention in workplace

LITE-ON prohibits all kinds of sexual harassment and discrimination within the workplace. The company has established related guidelines and policies, such as the Regulations for Establishing Measures of Prevention, Correction, Complaint and Punishment of Sexual Harassment and the Employee Moral Guidelines. LITE-ON has also setup e-mail mailboxes and hotlines. There are strict confidentiality rules in place to protect the complainant's identity. All 4 sexual harassment complaints received in 2019 had been closed. There were no sexual harassment complaints in overseas offices. Furthermore, to ensure all employees have an understanding of sexual harassment in the workplace and know their rights and how to respond and seek help, the internal training platform, the Learning Center, provides a scenario-based online course, "Say No to Sexual Harassment and Create a Better Workplace" for all employees. In addition, all new hires are required to complete the course. Meanwhile, in China, Thailand, and Vietnam, LITE-ON also uses orientation training to raise awareness and educate new hires on the company's rules and measures regarding human rights and sexual harassment prevention.

Employee satisfaction/engagement survey
LITE-ON conducts all employee satisfaction surveys in the form of an online survey or a dedicated printed survey. The industry and geographic conditions at the overseas plants vary from plant to plant. Survey results are sent to the management and the departments to provide a basis for service improvement and other improvements.

Labor Unions

Each LITE-ON’s major plant in Taiwan and overseas is equipped with a union, of which 59.25% of the workers are union members. Union representatives are elected by employees, and represent the employees in regular engagement with the management. Meanwhile, the unions gather information, call regular meetings, discuss counter measures, and direct union activities, such as group travel and employee care programs. The unions also work to protect the rights of employees and maintain a stable employer-employee relationship.

Percentage of union membership

2017	2018	2019
66.9%	64.64%	59.25%

Diverse Welfare Systems

Employees are LITE-ON's best partners on the path to sustainability. LITE-ON continues to build a comprehensive employee welfare system that takes care of the physical and mental health of employees. LITE-ON also strengthens occupational health and safety management at the plants in order to create a "passionate, motivating, innovative, and growing" environment and give employees an enjoyable work experience at LITE-ON. All benefits provided by LITE-ON around the world comply with or are better than the requirements of local regulations. Certain benefits are modified to suit individual plants.

Employee Assistance Programs (EAPs)

To help employees revolve everyday problems, LITE-ON in Taiwan operates a 24-hour toll-free hotline that provides free, professional, and highly confidential counseling service on psychological, management, legal, health, and financial topics.

➤ For more information on employee welfare measures, please see Human Resources section LOHAS at LITEON

Employee Care ▸