Foreign labor dispute looms

Taiwan may freeze labor imports from Indonesia and the Philippines if the two countries refuse to agree to a cut in the minimum wage for the workers they send here, a labor official said yesterday.

Taiwan this month slashed the minimum monthly wage of foreign workers from NT$15,840 (US$457.59) to NT$13,340, a 16 percent reduction.

Taiwanese authorities said the NT$2,500 reduction was to offset employers' costs in providing food and board for their imported workers.

The new measures will not apply to domestic workers, which account for about one third of the total foreign labor force.

S.H. Chen (陳伸賢), director of labor standards under the Council for Labor Affairs, said that the effect of the wage cut would be mitigated by a reduction in fees imported workers pay to brokers who place them with Taiwanese employers.

Brokerage fees shouldered by alien workers were reduced by NT$6,000 and another NT$6,000 in the worker's country of origin.

Currently, a foreign worker has to pay his Taiwanese broker a lump sum of NT$30,000.

Thailand and Vietnam have agreed to the new terms, but Indonesia and the Philippines are still holding out, he said.

Taiwan now says it is willing to make concessions by further lowering brokerage fees to as low as NT$10,000 to win the approval of the two countries, Chen said.

"If they still refuse to accept the terms, we will have no choice but to either scale back their quotas [for labor imports] or freeze their labor supply entirely," he said.

Taiwan suspended the import of Filipino workers in the manufacturing and construction sectors from June to December last year, a move widely seen as retaliation for Manila's suspension of a bilateral aviation agreement between Taiwan and the Philippines.

Local employers are expected to save a combined total of at least NT$526 million a month as a result of the wage reduction.

The new policy has raised concerns that employers will opt for foreign workers over local ones and worsen the all-time high jobless rate. Taiwan's unemployment rate reached a record 4.92 percent in July.

Last year, Taiwan started scaling down the number of foreign workers in the manufacturing and construction sectors by 15,000 a year in order to create more jobs for local workers.

Since earlier this year, foreign workers have been banned from new major public works projects.

Taiwan's total foreign workforce -- mostly from Thailand, the Philippines, Indonesia and Vietnam -- stood at 326,261 in July, down 3,351 from a month earlier.