The Chinese Nationalist Party’s (KMT) proposed “four laws for pay raises” yesterday drew fire from a labor rights activist.
The proposed reforms are largely unrealistic and likely “just for show,” Taiwan Labour Front member Chang Feng-yi (張烽益) said.
The KMT caucus on Wednesday last week said it would place the amendments to four labor-related laws — the Company Act (公司法), the Labor Standards Act (勞動基準法), the Small and Medium Enterprises Development Act (中小企業發展條例) and the Factory Act (工廠法) — on the top of its legislative agenda to secure better salaries and bonuses for workers.
It said the measures were necessary to allow workers to share in the nation’s economic gains and to stem a brain drain.
The amendments would stipulate that a fixed percentage of a company’s profits be allocated as bonuses for employees and that companies that fail to comply could be fined between NT$500,000 and NT$5 million (US$15,900 and US$159,000).
The reforms would also offer tax deductions for firms that offer increased employee bonuses.
During a legislative question-and-answer session yesterday, Minister of Labor Chen Hsiung-wen (陳雄文) said that if the reforms were passed, the ministry would likely initially require the nation’s 1,700 publicly traded companies to comply.
The ministry might encounter problems in determining the profits of small and medium enterprises, Chen said in response to a question from KMT Legislator Alicia Wang (王育敏) as to why such regulations could not be applied to the more than 630,000 businesses in the nation.
Chang said that the proposed reforms would be “impossible to enforce,” because it is unrealistic for the government to stipulate a fixed percentage of bonuses among diverse industries whose profits vary drastically.
He said the KMT was focusing on fixed bonuses as a way of avoiding the government’s responsibility to protect the rights of workers through other substantial reforms.
“In the past, the KMT has been reluctant about reforms that aimed to promote increased transparency of company revenues — such as proposals to include an employee representative on the board of directors — let alone establish regulations for bonuses,” Chang said.
The tax incentives could lead to even bigger problems, since there is no way to prevent small and medium enterprises from providing fraudulent data about increased bonuses to receive tax deductions, he added.
“Even if the amendments get passed, they will never be implemented,” Chang said.
Additional reporting by staff writer
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