Giant begins reimbursing migrant workers for broker fees

Taipei, Oct. 16 (CNA) Bicycle maker Giant Manufacturing Co. Ltd. said Thursday it has begun reimbursing migrant workers for expenses they paid to secure their jobs and pledged not to deduct future broker fees from their wages.

The move comes after the U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) covering bicycles, parts and accessories made by Giant in Taiwan, due to allegations of forced labor.

The CBP said an investigation into Giant identified indicators including "abuse of vulnerability, abusive working and living conditions, debt bondage, withholding of wages, and excessive overtime."

The CBP order does not apply to products made by Giant's factories outside Taiwan. The company also has manufacturing facilities in China, Vietnam, Hungary and the Netherlands.

Reimbursements

In a news release issued Wednesday, Giant said it had expanded its "Zero Recruitment Fee Policy" to all current migrant workers and begun reimbursing past fees to them this week.

Previously applicable only to migrant workers newly recruited since Jan. 1 this year, the policy requires the company to "bear all recruitment fees, service charges and related government costs," the release read.

In a reply to CNA on Thursday, Giant said "partial reimbursements" had been issued to migrant workers recruited before Jan. 1, beginning Tuesday.

The company, however, did not respond to CNA's inquiries about the amount to be reimbursed in the first phase or how many phases there will be.

It said the reimbursement covers fees paid by migrant workers in both their home countries and Taiwan during hiring, including broker fees, service charges, visa and document processing fees, medical examination costs and transportation expenses.

Before the policy was rolled out and expanded, migrant workers typically paid those fees either upfront with loans before being hired or through salary deductions after starting work, and brokers collected most of them.

Giant told CNA that starting Wednesday, it will "no longer deduct any related fees from wages."

"Salaries will be paid by the company, in accordance with the law, directly into each migrant worker's personal account, with no deductions for any recruitment-related items," the company added.

Extra costs and future hiring

On Oct. 8, the Chinese-language Commercial Times, citing industry estimates, reported that if employers cover migrant workers' agency and processing fees in both their home countries and in Taiwan, the average cost would be about NT$150,000-NT$200,000 (US$4,893-6,525) per worker.

Asked by CNA about the figure, Giant said it was "the media's own estimate based on general market rates, which we cannot confirm."

According to Giant, a third-party adviser it has commissioned "to identify, assess and develop a comprehensive compensation plan" for migrant workers hired before Jan. 1, 2025, will determine the final amount.

As of October, Giant employs 545 migrant workers, 406 from Thailand and 139 from Vietnam.

The company said it will continue using licensed agencies while also considering direct hiring.

"Regardless of the hiring channel, all fees will be fully borne by the company and not by employees," Giant said, adding that it has begun evaluating and updating contracts with partner brokers to ensure they meet "ethical recruitment" and "worker-pays-zero" standards.

Improved living conditions

In the Wednesday statement, the company said it has also completed the relocation of all migrant worker dormitories, with over 400 workers having moved into two newly built facilities "designed and upgraded in line with international labor and human rights standards."

Giant told CNA those standards draw on the "spirit" of the International Labour Organization's (ILO) "Fair Recruitment Initiative" and the United Nations Guiding Principles on Business and Human Rights.

"All dormitories have passed fire, building and public-safety inspections and provide reasonable living space, private bathrooms, and dining and leisure facilities," it added.

Response from civil society

Jason Lee (李正新), a social worker at the Rerum Novarum Center, said that Giant's approach does not address the root cause and could prompt brokers in workers' home countries to invent new charges and additional fees.

Having worked with migrant workers in Taiwan for years, Lee noted that they face many expenses even before leaving their home countries --including training, lodging, food, airfare and processing fees -- and that brokers could tack on other fees at that stage.

"Giant's approach will disrupt the entire ecosystem," he said, suggesting that the brokerage system "should be directly abolished."

Lee said migrant workers' loan repayments are deducted from their monthly wages, but their loan situations differ, with some borrowing from banks or other institutions, and home-country broker fees also vary, and urged Giant to specify exactly how much it will cover.