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Taiwan's minimum wage poised to hit NT$19,047/month
Publication Date : 20-02-2013
The hourly minimum wage is poised to be raised to NT$109 (US$3.68), with monthly wages to increase from NT$18,780 to NT$19,047, according to Taiwan Minister Pan Shih-wei of the Council of Labour Affairs.
The Executive Yuan last year stipulated that if the gross domestic product (GDP) can maintain a growth rate exceeding 3 per cent for two consecutive quarters, in conjunction with the unemployment rate staying below 4 per cent for two consecutive months, the minimum wage may be raised.
As of January 31, government statistics indicated the projected GDP growth rate to be 3.53 per cent. If this persists for another quarter, it is likely that policy will dictate that the minimum wage will be raised.
Pan expressed that he is anticipating the raising of the minimum wage in April with optimism.
Pan declined to give further comments on exactly when the minimum wage would be raised, whether it will come into effect as soon as economic indicators meet the requirements of the Executive Yuan in April, or after the Council of Labour Affair's minimum wage summit meetings scheduled for July.
Chang Pen-tsao, chairman of the General Chamber of Commerce of the ROC, indicated that there remain many details that need to be considered for enterprises to raise wages, emphasising that businesses are not opposed to better employee compensation but are limited by profitability.
Chang also indicated that the outlook on the global economy still remains murky, and that in the early stages of recovery, enterprises are reluctant to commit to raising wages.
“The timing is too early,” stated Chang.
Tsai Lien-sheng, secretary-general of the Chinese Federation of Industries (CNFI), stated that the issue of pension fund reform was not included in the discussions on raising the minimum wage.
Tsai expressed concern over the fact that enterprises will be required to increase their contribution to employee pension funds by yearly increments of 0.5 per cent until 2036, and this may represent a burden too great to bear.
Estimates indicate that under the new pension terms, businesses will be burdened with an additional NT$1.873 trillion by 2036.
Tsai said that under these great burdens enterprises may not be able to afford increased compensation terms, and that operations may be adversely affected by the coinciding policy to increase the requirements for the hiring of foreign workers.
Construction company KSECO, stated that while the raising of the minimum wage and overtime compensation will likewise apply to the foreign workers under their employment and raise operating costs, the effect will not be significant.
US$1 = NT$29.60