Working fewer hours each week can be a good thing, especially when it comes to reducing high-level work-related stress. As amendments to the Labor Standards Act (勞動基準法) took effect on Friday, employees now have two rest days in seven, with one being a “mandatory” day off and the other “flexible.” The new regulations also stipulate different calculations for overtime pay on “flexible” rest days. However, the new system is not automatically and immediately better than the old one.
A Taiwan Institute of Economic Research (TIER) survey found that the new workweek system might have negative effects, including the hiring of more part-time workers and a reduction of wage increase opportunities for full-time workers, while certain sectors are likely to pass on higher operating costs to consumers. Several bus companies are already mulling price hikes for long-haul services.
These findings deserve attention, because over the past few months people have paid too much attention to the elimination of seven national holidays and have given less consideration to other aspects of the new regulations. TIER found that the rubber, wood and machinery industries in the manufacturing sector would be seriously affected by the changes, while bus, home security and freight transport companies are the most vulnerable in the service sector.
Regarding changes to annual leave, the survey found that they would have a greater impact on companies whose majority of workers have been employed for less than five years and those with workers with more than 10 years in employment, in terms of work schedules and personnel costs.
The amended law would, in theory, have a positive effect on workers’ health, which in turn enhances the quality of services provided, and benefits companies and the economy as a whole. The laws are also seen as a way to encourage firms to improve working conditions and make their business globally competitive to retain workers, even if it means paying higher wages.
However, none of that is likely to happen soon, at least not in the time scale that President Tsai Ing-wen’s (蔡英文) administration has given.
Some companies are likely to freeze pay raises, cut bonuses or hire temporary workers as they attempt to lower costs and create a more flexible workforce, the survey said.
Earlier this month, a local industries trade group said that some companies are considering moving their operations overseas to save on labor costs.
Whenever labor reforms are discussed businesses threaten to go abroad. However, the survey is a wake-up call to the government that things might get worse next year if it cannot identify the blind spots in its policies and fix them.
With workers having suffered nearly 16 years of flat wages, possible hikes in bus fares and other fees only mean a further drop in real wages as consumer inflation rises.
Demand for higher wages, reduced working hours and greater wealth distribution has dominated elections in recent years, but there is no consensus on how to deal with the problems.
The leaders and public of Taiwan need to build a better society, but they should do much more toward conciliation and cooperation across the socio-political spectrum, to increase domestic investment and transform local industries into high value-added businesses, rather than just amending laws.
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