Executive Yuan revises policies on importation of foreign labor

This article was published by the Macroview Weekly on August 1, 2007. It reports that the government in Taiwan recently revealed major changes in its policies on foreign labor. These included the adoption of a “dynamic regulation” system that would streamline applications for foreign labor imports for major investment products and traditional manufacturing firms, as well as stiffer penalties for violations of labor regulations.

The foreign labor policy review by the Council of Labor Affairs and the Government Information Office was done in consideration of Taiwan's overall economic situation and concern over the rights of migrant workers.

The review included four aspects. First, the CLA would combine the application mechanisms for foreign labor allotments for major investment cases and for the so-called “3K” and three-shift manufacturing or construction works. (“3K” works refer to the Japanese terms of “kitsui” (arduous), “kitanai” (dirty) and “kurai” (dark) works.)

Second, the CLA will adopt a “flexible foreign labor proportion quota” system based on the type of industries and allot relatively higher shares of foreign labor to industries with higher rates of linkage.

Third, the CLA will revise methods of recruitment. These include evaluation of the possibility of lowering the monthly contributions to the national employment stability fund made by employers of foreign care workers, and streamlining the procedure by which foreign care workers can shift employers.

Moreover, the government “will more actively promote the establishment of direct hiring systems with the governments of foreign labor supplying countries for the sake of protecting the rights of foreign workers in order to prevent illegal exploitation by employers or illegal brokers”.

However, government officials stressed that the precondition for any relaxation in foreign labor imports was that “suitable adjustments” did not affect the employment opportunities of domestic labor and spur a renewed rise of unemployment.

CLA officials also claimed that expanding allotments for “3K” and “three-shift” operations would not influence employment of Taiwanese workers.

To ease shortages of foreign workers in companies involved in major investments, the CLA would lift the requirement that a firm would have to add local workers before hiring additional foreign laborers.

CLA officials added that companies in “A” category sectors, including metal foundries, plastics and basic metals, would be allowed to boost their share of foreign workers to up to 20 percent from the current 15 percent, while “B” sector firms in plastic products, glass, glass fibers, textiles and fabric dyeing should be able to boos their shares to up to 18 percent.

However, the CLA would conduct quarterly reviews of the overall share of domestic and foreign workers and impose heavy fines on violators of the agreed quota.

According to CLA data, traditional manufacturing companies are suffering a shortfall of 42,295 workers for “3K” and “three-shift” operations, of which 30,000 would be supplied by the more relaxed policy, leaving a gap of nearly 13,000.

The CLA was considering reducing the national employment stabilization levy from NT$2,000 to NT$600 a month for “disadvantaged families”, but added that the move still required clearer definition of eligibility.

Moreover, future applications for the transfer of foreign care workers from one employer to another could be negotiated between the existing and future employers and the foreign worker in question. Such applications would be reviewed within two months at most.

Representatives from the Taiwan Labor Front claimed that pro-labor groups are concerned with “what actually is the substantive content of ‘dynamic regulation'”.

“The number of foreign workers has risen to over 350,000 and, although the official unemployment figure is at is lowest for several years, there is still a considerable degree of disguised or hidden unemployment that is not well manifested,” said these representatives, who stated that the CLA had “lost control” over imports of foreign labor.