New minimum wage hike comes into effect July 1

This article was published by the Macroview Weekly on July 4, 2007. It reports that the Council of Labor Affairs (CLA) recently worked out five measures to help mitigate the impact on small- and medium-sized enterprises as the 9.09 percent minimum wage hike came into practice on July 1, 2007.

The government announced early in June that the minimum wage will be raised to NT$17,280 (US$523) per month, while the hourly wage will be NT$95.

About 1.41 million “marginal” members of Taiwan's workforce -- including foreign laborers, part-time workers, senior citizens who have returned to the employment market after retirement and female workers -- are expected to benefit from the wage hike.

To offset the expected negative impact, the CLA has decided to subsidize owners of certain businesses, including fast-food chains, restaurants, supermarkets and gas stations, with a working staff of less than 50 people. The owners will be entitled to subsidies of NT$10 per hour per head when the staff members work less than 32 hours a week. This subside incentive will be implemented for one year on a trial basis.

The CLA has also decided to offer subsidies of NT$5,000 per month per head to owners of companies which employ disadvantaged workers, including physically and mentally challenged people and senior citizens.

To deal with the possibility that many workers may lose their jobs because of the hike in the minimum hourly wage, the CLA will also work to help disadvantaged workers in three-prong way by helping them find employment, receive vocational training and unemployment subsidies.

The food and accommodation allowance provide to foreign laborers working in Taiwan is raised from the current NT$4,000 per month to NT$5,000.

CLA vocational training subsidies will also be raised as the fifth measure to deal with the impact of the hike in the minimum wage, which had remained unchanged since 1997.