Taiwan: New Minimum Wage Proposed

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(Aug 05, 2011) On July 21, 2011, the Council of Labor Affairs (CLA) announced its decision on a proposal to increase Taiwan's monthly minimum wage by 5.03%. If approved by Taiwan's Executive Yuan (Cabinet), the increase from NT$17,880 (about US$617) to NT$18,780 (about US$651) per month will take effect in January 2012. According to CLA Minister Wang Ju-hsuan, the basic hourly wage would increase from NT$98 (about US$3.39) to NT$103 (about US$3.57) if the measure is adopted. Monthly health premium rates would rise by NT$100 (about US$3.46) for employers and NT$28 (about US$0.97) for workers with the implementation of the new wage. (Grace Kuo, CLA Raises Taiwan's Minimum Wage, TAIWAN TODAY (July 22, 2011).)

The CLA body that settled on the increase, the Minimum Wage Review Committee, comprises 21 members: three CLA officials, seven labor representatives, seven employer representatives, and four scholars. (Minimum Wage to Be Increased by Five Percent, THE CHINA POST (July 22, 2011).) Representatives for both labor and management, however, expressed dissatisfaction with the decision that was reached.

According to Hsieh Chuang-chih, secretary-general of the Taiwan Confederation of Trade Unions, "[b]ased on the lowest average daily cost of living per person and the average number of people every household has to support, the minimum wage standard should be NT$23,459" (about US$813). (Kuo, supra.) This calculation is reportedly based on the minimum subsistence level of NT$10,244 per month (stipulated in social welfare regulations) multiplied by 2.29, the average number of family members each worker must support. (THE CHINA POST, supra.) Given that Taiwan's economic growth jumped by nearly 11% in 2010, Hsieh also noted, "[t]here should be room for the Cabinet to make adjustments for a higher minimum wage." (Kuo, supra.) Labor groups had demanded an increase of 31.4% and, during the convening of the meeting, labor protesters took to the streets outside the CLA building to demand an increase in the minimum wage of about that rate. (THE CHINA POST, supra.)

On the other hand, Tsai Sui, a representative of the Chinese National Federation of Industries, commented that employers' costs would increase by NT$34.8 billion a year if the new basic wage is adopted, forcing enterprises that could not shoulder the burden "to relocate, shut down or cut staff." (Kuo, supra.)

At least 17% of Taiwan's work force, roughly 1.4 million people, earn the minimum wage, which remained flat for the decade 1997-2006, then saw an increase of 9% in 2007, from NT$15,840 (about US$549) to NT$17,280 (about US$599), followed by another raise of 3.47% in January 2011, to reach the current NT$17,880 level. (THE CHINA POST, supra; see also Regulations for Deliberation of Basic Wage [English & Chinese texts available], Council of Labor Affairs website, (last visited Aug. 3, 2011).)

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Last updated: 08/05/2011