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Businesses feel pinch of new labor law amendment

Convenience stores and other businesses are faced with labor shortage due to new work week rules

Taipei Bridge Station 7-ELEVEN

Taipei Bridge Station 7-ELEVEN (Wikimedia Commons photo)

Taipei (Taiwan News) -- Some business sectors are reporting a rise in costs as a result of the new "one fixed day off and one flexible rest day" (一例一休) system, with convenience stores estimating a 20 percent increase in labor costs and some stores closing two days a week to cut costs.

On Dec. 23, an amendment to the Labor Standards Act went into effect requiring all workers to receive two days off for every week worked to ensure workers are guaranteed a 40-hour workweek. Since the law kicked in, labor-intensive sectors have complained about the increased cost of overtime and even difficulty scheduling workers' shifts.

In response to rising operating costs, the well-known restaurant chain Chang Lu Rou Fan (also known as Hu Xu Zhang, 鬍鬚張魯肉飯) has announced price increases for 13 items, and netizen simon945168 said logistics company HCT is planning on not receiving or delivering goods on Sundays or national holidays due to the new law.

Taiwan's many 24-hour convenience stores will face difficulties in finding enough staff to man the counters. One manager with 10 years of experience in the business told CNA that personnel costs will go up 20 percent, cutting into the profits of such stores which currently run on a thin profit margin of about NT$70,000 per month.

He added that as of Jan. 1 this year, the monthly minimum wage has risen from NT$20,008 to NT$21,009 and the hourly wage has increased from NT$126 to NT$133, so it makes more sense to hire students or part-time staff to be cost effective. Yet he fears that such employees would officially work for one employer during the week and then work part-time during their days off, and that the most productive employees would be poached by rival businesses.

Another possible effect is that the waiting time in line for customers may increase.

The shopkeeper said that the workload in convenience stores is intense, before the new law it was already difficult to recruit workers, especially in the evenings during the examination period when students are have less time to schedule shifts. Now with the new work restrictions, instead of four employees being available to work on a given day, there will only be three, which means that customers will have to wait longer for coffee to be brewed, food to be heated and to make general purchases.

He also said that because the new system, the areas around offices, schools and factories will be less crowded on the original holidays, business will drop off to a level below which stores can break even, leading the head office to consider closing shops two days a week, simply make ends meet.

In December, convenience stores began to discontinue 24-hour operations, posting notices such as "Business hours have been adjusted, this store will be closed for six hours out of every 24 hour day," meaning that they would close later in the evenings in an effort to cut costs.

The beauty and hairdressing industry, much criticized for its long working hours, has also had to adjust its work schedule due to the new rules. The manager of a beauty salon in New Taipei told CNA "In the month of January alone, there were be 13 days of vacation, each day there are only two or three beauticians on staff, this not only makes customers angry when they can't make an appointment, beauticians are also constantly complaining that their performance is suffering and profits are dropping."

Although most of the department stores say the new laws would not have much of a direct impact because they already had a flexible shift system in place, internal labor costs have indeed increased, with scheduling becoming more difficult and more complex, and scheduling less flexible. They are also worried about manpower issues during Mother's Day or other anniversaries and large holidays.

As for the supermarkets such as RT-Mart, plans are in the works to hire additional staff to in response to the drop in work hours. They plan to streamline their work processes, upgrade their equipment, and reduce workloads, which will increase the number of vacancies for future employees.

With the Spring Festival rapidly approaching, RT-Mart and Carrefour said that they need to hire more than about 1,000 people to cope with the shortage of labor due to the new work hour limits and overtime payment regulations.

Another concern for convenience stores is that as a wave of new hires slowly comes online, customers will become irate and impatient with the increased wait times due to reduced staff and rookie employees behind the counter. It will take time for the new clerks to learn how to handle large volumes of impatient customers and become familiar with the checkout process, and customers for their part will need to be patient as the new workers get up to speed.