From June 30, publicly listed companies will have to disclose the average wage of their non-managerial employees. The policy was announced by Financial Supervisory Commission Chairman Wellington Koo (顧立雄) at a meeting of the Legislative Yuan’s Finance Committee on Nov. 8 as the financial regulator aims to improve corporate governance and transparency.
The policy also reflects the government’s efforts to address the problem of low, stagnant wages.
Under current rules, companies listed on the Taiwan Stock Exchange (TWSE) or the Taipei Exchange have to disclose the average of all employees’ benefits — including wages, pensions, and labor and health insurance — in annual financial statements at the end of March.
However, under the new requirements, listed companies are to disclose the average benefits and wages of non-managerial employees, as well as earnings per share (EPS) on the TWSE’s Market Observation Post System (MOPS).
Furthermore, lawmakers led by Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) have submitted a draft amendment to the Securities and Exchange Act (證交法) to require listed companies to disclose in their financial statements information on wage adjustments.
These moves indicate that pressure is increasing on listed companies — they face fines of between NT$240,000 and NT$2.4 million (US$7,770 and US$77,700) if they fail to disclose employees’ wages — while there is likely to be a ripple effect on corporate reputations and stock prices.
The new measures would require listed companies to explain certain situations, such as when the average of annual wages for non-managerial employees falls below NT$500,000; when a company posts increased EPS, but a decline in the average wage; or when its EPS outperforms rivals’, but the average wage is lower than its peers’.
As of June 2020, listed companies must include the median of benefits and wages for non-managerial employees in their MOPS disclosures and financial statements, the commission said.
The issue of low wages has long been a source of public complaint. The government this year responded by announcing a 3 percent pay rise for public employees and by raising the minimum salary by 5 percent — from NT$22,000 to NT$23,100 — and the hourly minimum wage by 7.14 percent — from NT$140 to NT$150. The changes are to take effect on Jan. 1.
However, people should not expect the issue to be resolved overnight, as it involves a complicated set of factors ranging from the nation’s economic structure and level of social development to corporate concerns over taxes, environmental rules, labor competitiveness and other cost issues, as well as exploitation of workers and distortions in the labor market.
The government has for far too long failed to put pressure on businesses to improve corporate governance and transparency. The new requirement is a small — but important — step in the right direction, as it would help employees and jobseekers better understand the industry and equip themselves to fight for benefits. It would also increase competition among companies hiring or seeking to retain talent.
However, the government cannot order listed companies to increase wages, and some people have questioned whether the new policy would alleviate wage stagnation, as only listed firms are affected by the rules.
The government must keep the bigger picture in mind: How can more investment be fostered so companies can remain profitable and pay higher wages?
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