April 2026
Taiwan Ministry of Labor Issues "Reference Guidelines for Enterprises on Preventing Forced Labor" — Labor Law Risks in International Trade and Supply Chains
I. Introduction
Forced labor has emerged as a core issue in risk management for international trade and cross-border supply chains. Article 3.9, Paragraph 3, Subparagraph (b) of the Agreement on Reciprocal Trade concluded between Taiwan and the United States in February 2026 expressly requires Taiwan to eliminate all forms of forced labor [1] . Similarly, Article 1 of Part A of the 2025 RBA Code of Conduct, which primarily governs companies in the electronics and retail sectors, also explicitly prohibits forced labor [2] . To assist enterprises in complying with international norms on forced labor, the Ministry of Labor issued the "Reference Guidelines for Enterprises on Preventing Forced Labor" ("Guidelines") on February 13, 2026, providing enterprises with concrete indicators and assessment principles. This article summarizes the key contents of the Guidelines below.
II. Definition and Assessment of Forced Labor
A. Definition and 11 Indicators of Forced Labor
Under the definition established by the International Labour Organization ("ILO"), forced labor refers to any work or service that a person is compelled to perform involuntarily under threat or punishment. Forced labor may further be assessed using the 11 indicators developed by the ILO. The Guidelines organize these indicators into the following tiers to help enterprises more concretely understand forced labor: key core, primary means of control, derivative forms of exploitation, and reinforced means of control.
It should be noted that not all forms of forced labor necessarily involve Indicator 9 - Debt Bondage as a core element. Enterprises should assess the overall level of forced labor risk by considering how many indicators are present in combination.
B. Assessment Methodology
The Guidelines provide concrete assessment recommendations for each indicator. For example, in evaluating whether Indicator 9 - Debt Bondage is established, enterprises should examine: (1) whether the contract stipulates that workers may repay wage advances through their labor; and (2) whether the enterprise bears recruitment costs on behalf of workers. Enterprises may also refer to relevant documentation, including recruitment policies, payroll records, wage advance records, and recruitment fee payment records, to determine whether Indicator 9 is present.
III. Elimination and Prevention of Forced Labor Risks
The Guidelines provide enterprises with concrete action principles for identifying, eliminating, and preventing forced labor risks, summarized as follows:
A. Policy Commitment
Enterprises should, by reference to international conventions and guidelines, formulate a "Human Rights Policy Commitment" or a "Zero-Tolerance Policy on Forced Labor," and incorporate it into their work rules, training programs, and employee handbooks to ensure that both employees and management understand and implement these policies.
B. Periodic Internal Audit of Forced Labor Risks
Enterprises should comprehensively collect internal data and records, including work rules, employment contracts, and payroll records, and conduct on-site observations, interviews, or anonymous surveys to assess the risk level associated with each forced labor indicator. Based on this assessment, enterprises should evaluate whether remedial measures are necessary and establish a timeline for completing any required improvements.
C. Individual Case Response and Remediation
Upon becoming aware of a suspected forced labor incident, enterprises should take at minimum the following steps:
1. Initiate an Internal Investigation: Immediately cease the improper conduct and investigate the facts, the degree of risk, and the scope of the impact.
2. Formulate a Remediation Plan: Prioritize actions according to risk level, set improvement objectives and measures, designate responsible units, and establish a tracking and verification mechanism.
3. Provide Substantive Redress: Pay any outstanding wages to affected workers, compensate for losses, and provide medical, psychological, or other support as needed.
D. Periodic Monitoring and Prevention
Enterprises should establish systems for detecting potential forced labor risks and implement preventive measures to proactively reduce the likelihood of forced labor occurring. Recommended measures include:
1. Periodically assessing whether internal and external labor recruitment agencies comply with applicable laws and regulations.
2. Establishing institutional safeguards against forced labor, including: (1) strengthening working-hours management; (2) setting up safe, multilingual, and accessible employee complaint channels; (3) contractually binding the conduct of cooperating labor recruitment agencies; and (4) implementing whistleblower protection mechanisms.
3. Providing employees and supervisors with training on the prohibition of forced labor.
E. Supply Chain Management
Enterprises should also implement forced labor risk management across their supply chains. Specific measures include:
1. Assessment and Audit: Enterprises should assess forced labor risks among suppliers with significant human rights impact, high production value, or critical business importance.
2. Supervision and Training: Enterprises should require suppliers to sign zero-tolerance commitments on forced labor and include suppliers within the scope of audits and training programs.
3. Periodic Review of Implementation: Enterprises should establish elimination targets and action roadmaps with suppliers and periodically review the effectiveness of their implementation.
IV. Potential Consequences for Enterprises Involved in Forced Labor
Although Taiwan currently lacks legislation specifically targeting forced labor, Article 31, Paragraph 2 of the Human Trafficking Prevention Act already provides for criminal penalties in respect of forced labor arising from debt bondage, and Article 40 of the same Act further establishes criminal liability for legal persons. From a business perspective, however, the risks extend beyond domestic legal liability and internal control failures: enterprises may also face exclusion from specific supply chains or have their products barred from import into certain countries, which could seriously undermine their competitive standing and result in substantial financial losses.
In light of the foregoing, enterprises are advised to promptly commence an internal audit of forced labor risks and to seek professional legal counsel to help identify such risks and establish appropriate response systems and measures.
[1] Agreement Between the Taipei Economic and Cultural Representative Office in the United States and the American Institute in Taiwan on Reciprocal Trade Between Taiwan and the United States of America, Executive Yuan: https://twustariff.ey.gov.tw/uploads/attachments/files/TW-US_ART_English_version_AuSq7V.pdf (last visited March 30, 2026).
[2] Responsible Business Alliance Code of Conduct, Responsible Business Alliance: https://www.responsiblebusiness.org/media/docs/RBACodeofConduct8.0_English.pdf (last visited March 30, 2026).
Forced labor has emerged as a core issue in risk management for international trade and cross-border supply chains. Article 3.9, Paragraph 3, Subparagraph (b) of the Agreement on Reciprocal Trade concluded between Taiwan and the United States in February 2026 expressly requires Taiwan to eliminate all forms of forced labor [1] . Similarly, Article 1 of Part A of the 2025 RBA Code of Conduct, which primarily governs companies in the electronics and retail sectors, also explicitly prohibits forced labor [2] . To assist enterprises in complying with international norms on forced labor, the Ministry of Labor issued the "Reference Guidelines for Enterprises on Preventing Forced Labor" ("Guidelines") on February 13, 2026, providing enterprises with concrete indicators and assessment principles. This article summarizes the key contents of the Guidelines below.
II. Definition and Assessment of Forced Labor
A. Definition and 11 Indicators of Forced Labor
Under the definition established by the International Labour Organization ("ILO"), forced labor refers to any work or service that a person is compelled to perform involuntarily under threat or punishment. Forced labor may further be assessed using the 11 indicators developed by the ILO. The Guidelines organize these indicators into the following tiers to help enterprises more concretely understand forced labor: key core, primary means of control, derivative forms of exploitation, and reinforced means of control.
| Tier | Indicator | Description |
| Key Core | Indicator 9: Debt Bondage | A common root cause of forced labor |
| Primary Means of Control |
Indicator 1: |
Exploiting workers' vulnerable positions to exert control |
| Indicator 2: Deception | Deceiving workers through false representations | |
|
Indicator 7: |
Restricting workers' ability to leave | |
| Derivative Forms of Exploitation |
Indicator 3: |
Physically restricting workers' freedom of movement |
|
Indicator 8: |
Arbitrarily deducting, delaying, or withholding wages | |
|
Indicator 10: |
Unsafe or unsanitary working or accommodation conditions | |
| Indicator 11: Excessive Overtime | Compelling workers to work extended hours | |
| Reinforced Means of Control | Indicator 4: Isolation | Preventing workers from communicating with the outside world |
|
Indicator 5: |
Employers subject workers to violence or sexual assault | |
|
Indicator 6: |
Threatening workers with deportation, dismissal, or similar measures |
It should be noted that not all forms of forced labor necessarily involve Indicator 9 - Debt Bondage as a core element. Enterprises should assess the overall level of forced labor risk by considering how many indicators are present in combination.
B. Assessment Methodology
The Guidelines provide concrete assessment recommendations for each indicator. For example, in evaluating whether Indicator 9 - Debt Bondage is established, enterprises should examine: (1) whether the contract stipulates that workers may repay wage advances through their labor; and (2) whether the enterprise bears recruitment costs on behalf of workers. Enterprises may also refer to relevant documentation, including recruitment policies, payroll records, wage advance records, and recruitment fee payment records, to determine whether Indicator 9 is present.
III. Elimination and Prevention of Forced Labor Risks
The Guidelines provide enterprises with concrete action principles for identifying, eliminating, and preventing forced labor risks, summarized as follows:
A. Policy Commitment
Enterprises should, by reference to international conventions and guidelines, formulate a "Human Rights Policy Commitment" or a "Zero-Tolerance Policy on Forced Labor," and incorporate it into their work rules, training programs, and employee handbooks to ensure that both employees and management understand and implement these policies.
B. Periodic Internal Audit of Forced Labor Risks
Enterprises should comprehensively collect internal data and records, including work rules, employment contracts, and payroll records, and conduct on-site observations, interviews, or anonymous surveys to assess the risk level associated with each forced labor indicator. Based on this assessment, enterprises should evaluate whether remedial measures are necessary and establish a timeline for completing any required improvements.
C. Individual Case Response and Remediation
Upon becoming aware of a suspected forced labor incident, enterprises should take at minimum the following steps:
1. Initiate an Internal Investigation: Immediately cease the improper conduct and investigate the facts, the degree of risk, and the scope of the impact.
2. Formulate a Remediation Plan: Prioritize actions according to risk level, set improvement objectives and measures, designate responsible units, and establish a tracking and verification mechanism.
3. Provide Substantive Redress: Pay any outstanding wages to affected workers, compensate for losses, and provide medical, psychological, or other support as needed.
D. Periodic Monitoring and Prevention
Enterprises should establish systems for detecting potential forced labor risks and implement preventive measures to proactively reduce the likelihood of forced labor occurring. Recommended measures include:
1. Periodically assessing whether internal and external labor recruitment agencies comply with applicable laws and regulations.
2. Establishing institutional safeguards against forced labor, including: (1) strengthening working-hours management; (2) setting up safe, multilingual, and accessible employee complaint channels; (3) contractually binding the conduct of cooperating labor recruitment agencies; and (4) implementing whistleblower protection mechanisms.
3. Providing employees and supervisors with training on the prohibition of forced labor.
E. Supply Chain Management
Enterprises should also implement forced labor risk management across their supply chains. Specific measures include:
1. Assessment and Audit: Enterprises should assess forced labor risks among suppliers with significant human rights impact, high production value, or critical business importance.
2. Supervision and Training: Enterprises should require suppliers to sign zero-tolerance commitments on forced labor and include suppliers within the scope of audits and training programs.
3. Periodic Review of Implementation: Enterprises should establish elimination targets and action roadmaps with suppliers and periodically review the effectiveness of their implementation.
IV. Potential Consequences for Enterprises Involved in Forced Labor
Although Taiwan currently lacks legislation specifically targeting forced labor, Article 31, Paragraph 2 of the Human Trafficking Prevention Act already provides for criminal penalties in respect of forced labor arising from debt bondage, and Article 40 of the same Act further establishes criminal liability for legal persons. From a business perspective, however, the risks extend beyond domestic legal liability and internal control failures: enterprises may also face exclusion from specific supply chains or have their products barred from import into certain countries, which could seriously undermine their competitive standing and result in substantial financial losses.
In light of the foregoing, enterprises are advised to promptly commence an internal audit of forced labor risks and to seek professional legal counsel to help identify such risks and establish appropriate response systems and measures.
[1] Agreement Between the Taipei Economic and Cultural Representative Office in the United States and the American Institute in Taiwan on Reciprocal Trade Between Taiwan and the United States of America, Executive Yuan: https://twustariff.ey.gov.tw/uploads/attachments/files/TW-US_ART_English_version_AuSq7V.pdf (last visited March 30, 2026).
[2] Responsible Business Alliance Code of Conduct, Responsible Business Alliance: https://www.responsiblebusiness.org/media/docs/RBACodeofConduct8.0_English.pdf (last visited March 30, 2026).
