February 2024
Elizabeth Pai and Andrew Huang
On December 12, 2023, Taiwan’s Legislative Yuan enacted the Minimum Wage Act (hereinafter “Act”) to guarantee reasonable wages and adequate standards of living for employees, and to foster harmonious labor-management relations. The Executive Yuan of Taiwan promptly approved the Act to be effective from January 1, 2024. After the implementation of the Act, the mutually agreed-upon wage between employers and employees under Taiwan’s Labor Standards Act shall not fall below the minimum wage stipulated by the Act. In case of a violation of this Act, the competent authority will impose a maximum fine of NTD1,500,000 on the employer and shall publicly disclose the name of the enterprise and the person in charge. The brief introduction to the Act is as follows:
I. Minimum Wage Council
As the competent authority for the Act, the Ministry of Labor (hereinafter “MOL”) shall establish the Minimum Wage Council (hereinafter “Council”) to review the minimum wage and make recommendations for adjustments (Article 6 of the Act). The Act stipulates the composition, tenure, and operation of the Council (see Articles 7, 8, 10, & 11 of the Act).
II. Indicators and Research Group
The Council shall consider the year-on-year growth rate of the Consumer Price Index to propose adjustments to the minimum wage. Additionally, in reviewing the minimum wage, it may consider ten (10) set of data, including changes in the cost of living, producer price fluctuations, wages of workers in various industries, household income and expenses, and minimum living expenses (Article 9 of the Act).
As a preliminary measure for determining the minimum wage, the MOL will convene a Research Group comprising representatives from various government agencies, employers, employees, and scholars. The Research Group is tasked with two missions: (i) presenting a comprehensive report on the economic and employment implications of implementing the minimum wage to the Council every April, and (ii) submitting a research report on minimum wage indicators, along with recommendations for adjustments, thirty (30) days prior to Council meetings (Article 12 of the Act).
III. Decision and Approval Procedures
The Act establishes the mechanism of determination and reevaluation of the minimum wage (Article 13 of the Act). Unless the Council deems it necessary to choose an alternative date, the approved minimum wage set by the Executive Yuan of Taiwan will take effect on January 1 of the following year (Article 14 of the Act).
IV. Penalties to Safeguard the Minimum Wage
If the agreed-upon wage between employees and employers falls below the minimum wage stipulated by the Act, the competent authority of the city/county will, at its sole discretion, impose a fine ranging from NTD20,000 to NTD1,000,000 on the employer or the enterprise, according to Article 17 thereof. The competent authority will consider factors such as the number of affected employees, the frequency of violations, or the unpaid amount when making decisions. It may increase the fine up to NTD1,500,000 based on the scale of the enterprise, the number of violators, or the consequences of the violation. Additionally, the competent authority shall (i) publicize the name of the enterprise or owner, the name of the person in charge, the date of imposition, and the fine amount, and (ii) instruct the violator to rectify the situation within a specified timeframe. Failure to rectify the situation within the designated period will result in subsequent penalties.
V. Align the Minimum Wage with the New Act
Arrangements are made to fulfill the Act’s role as a specialized statute dedicated to ensuring the protection of minimum wage. Following its implementation, the Act will govern the minimum wage-related provisions in other laws and regulations (Article 18 of the Act). Notwithstanding, the existing minimum wage set by the Labor Standards Act will remain effective until the MOL announces the minimum wage in accordance with the Act (Article 15 of the Act). Meanwhile, the Labor Standards Act will be applicable to the supervision and examination of the minimum wage (Article 16 of the Act).
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