Thu, Jun 07, 2007 - Page 1 News List

Minimum wage to increase on July 1

ABOUT TIME The Council of Labor Affairs' proposed hike of 9.09 percent was made public yesterday. National Health Insurance premiums, however, may also climb

By Angelica Oung and Jimmy Chuang  /  STAFF REPORTERS

The minimum wage will increase to NT$17,280 per month or NT$95 per hour on July 1, the Cabinet announced yesterday.

"This [the increase] will help workers in their daily lives. It will also help re-invigorate the economy," Premier Chang Chun-hsiung (張俊雄) said during yesterday morning's weekly Cabinet meeting.

The premier said that the new minimum wage would also cover employees' paid holidays.

In addition to introducing the new policy, the premier also asked the Council of Labor Affairs (CLA) to communicate with employers so the new policy was implemented as smoothly as possible.

The minimum wage has been frozen at NT$15,840 per month or NT$66 per hour since 1997.

"For the past 10 years, inflation has continued to rise but the minimum wage has always stayed the same. It is time for us to make a change," Chang said.

The minimum wage entered the spotlight in April, when former premier Su Tseng-chang (蘇貞昌) announced he would increase it on July 1.

Then, on April 27, CLA officials, academics, financial officials and labor representatives came up with an agreement that the increase would be somewhere between 7.5 percent and 9.5 percent.

The CLA proposed a rate of 9.09 percent to the Cabinet and that rate was approved before being introduced to the public yesterday.

To minimize the impact of the wage increase on businesses, the CLA proposed several counterbalancing measures in addition to a rash of new services to help the unemployed find jobs.

Small and medium businesses will be given a NT$10 per hour per employee subsidy for part-time workers to offset part of the hike.

The CLA will also expand its support for employee training, subsidizing up to 80 percent of training costs. The council also plans to raise the suggested upper limit for food and lodging costs that employers can deduct from the salaries of migrant laborers from NT$4,000 to NT$5,000 following the wage hike, a CLA release said.

Labor activist Wong Ying-dah (汪英達) blasted the council's proposed measures as "a sop to business interests."

"They are using taxpayers' money to pay off businesses who might be upset by the hike," Wong said. "Meanwhile, both National Health Insurance and Labor Insurance premiums are set to rise for a large portion of the population because of the minimum wage hike. Where are the ameliorative measures for them?"

The minimum wage hike will affect health insurance premiums for some, Bureau of National Health Insurance (BNHI) officials said.

If the lowest insurable wage rises from NT$15,840 to NT$17,860, the premiums for around 2.1 million people would be affected, which would raise a further NT$1.4 million for the BNHI, or a NT$15 per month per person hike.

The BNHI may also hike premiums for workers in other categories to reflect the wage hike, pending review by the Executive Yuan.

Wong also criticized the increase in the suggested food and lodging deductions from the salaries of migrant workers as "a backdoor way to institute unequal pay for equal work."

Also see story:
Business groups slam wage increase

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