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Taiwan minimum wage bill calls for fines of up to NT$1 million for employers who violate law

Draft of minimum wage bill seeks to set new mechanism to determine minimum wage, threatens violating employers with NT$1 million fine

Taiwan minimum wage bill calls for fines of up to NT$1 million for employers who violate law

(CNA photo)

TAIPEI (Taiwan News) -- Taiwan’s Ministry of Labor (MOL) announced a national minimum wage draft bill, which makes provision for the introduction of a mechanism and economic indexes governing the decision-making process regarding adjustment of the national minimum wage, as well as setting stiff penalties for employers who violate the law, reported ETtoday.

The minimum wage draft bill, which would affect 2.26 million workers, is an important cornerstone of the Tsai administration's labor policy. The objective of the drafted minimum wage law is to establish a legal framework for setting the benchmark of salaries of laborers.

The preliminary basic structure has five key points. First, an annual minimum wage review conference will be convened by the Ministry of Labor. Its members are to be representatives of the following four public sectors: labor, industry, politics, and academia. The review conference shall be held regularly in the third quarter of each year to draw up a consensus on a minimum wage adjustment scheme through the mechanism of social dialogue.

The second, is to specify the rules of procedure for the review conference, including the threshold of the conference and the mode of resolution, in which the principle of "decision by consensus" is adopted. If consensus cannot be reached, the resolution will be made by "majority decision," and the adjustment results will drawn up by the review conference. Follow-up related verification procedures and schedules, as well as re-examination mechanisms will be evaluated by the Cabinet, to eliminate the uncertainty of the minimum wage adjustment.

Third, in order to institutionalize the review mechanism and adjusting indicators, "should" indicators will be defined, such as the annual consumer price index and the "get" indicators, which include nine indicators, such as the annual labor productivity index, the annual average wages of laborers, and the state of the nation's economic development. At present, indicators that are more common among all walks of life are listed as the indicators that should be adopted..

The third is to institutionalize the review mechanism and adjustment indicators, and to specify the "should" participation indicators, such as the annual increase of the consumer price index, and the "acquisition" index, including the annual growth rate of the labor productivity index and average worker wages. There are nine items such as annual salary increase rate and the nation's economic development status. At present, the more common indicators are listed as indicators for participation to make the adjustment mechanism stable and clear.

The fourth, is to set up a "research group" to make a comprehensive assessment of the impact of the previous minimum wage implementation and changes in relevant data according to the adjustment indicators, and to put forward suggestions to facilitate deliberations and discussions.

Finally, to avoid a gap in the application of law, before the public announcement of the first implementation of the new minimum wage, the original approved basic wage amount shall continue to be applied. The first time a new minimum wage is set, it shall not be less than the original basic wage, in order to ensure labor rights and interests.

During a meeting at the Legislative Yuan earlier this year Labor Minister Hsu Ming-chun (許銘春), said that the draft of the minimum wage Law would be sent to the Cabinet by the end of the year. At the time, DPP lawmaker Chiang Yung-chang (江永昌), questioned who would be responsible if the draft was not sent to the Legislative Yuan at the end of the year. Hsu said, "I am responsible".

However, as the announcement will not be completed until Jan. 29, 2019, the draft can only be sent to the Cabinet in February next year, at the soonest.