COST OF LIVING/Legislative Yuan passes minimum wage bill (update)

Taipei, Dec. 12 (CNA) The Legislative Yuan on Tuesday gave the green light to a proposed minimum wage act, which stipulates that minimum wages in Taiwan should be adjusted with reference to the annual rise of the consumer price index (CPI).

The 19-article act -- which is based on a proposal by the ruling Democratic Progressive Party (DPP) -- largely formalizes and expands on the mechanism the government already uses to adjust the minimum wage.

The law instructs the Ministry of Labor to convene a 21-member review committee, chaired by the labor minister, consisting of seven representatives each of labor and industry, four scholars or experts, and one official each from the Ministry of Economic Affairs (MOEA) and the National Development Council (NDC).

The committee is required to meet in the third quarter of each year to review the minimum wage and recommend possible adjustments, based primarily on reference to annual CPI growth, but also to 10 other indicators, such as per capita income, gross domestic product growth and minimum living expenses.

The law states that the committee should reach a consensus on any proposed adjustments to the minimum wage, or, failing that, pass them with a majority vote.

If the Cabinet does not accept the committee's recommendations, it is required to conduct a follow-up review and re-submit its proposal, according to the law.

Meanwhile, the act also mandates the creation of a "research team" comprising scholars, experts and representatives of relevant government agencies, to report to the review committee every April on the effects of minimum wage adjustments on the economy and employment.

The team will also recommend any minimum wage adjustments at least 30 days before the review committee meets, according to the act.

In terms of enforcement, the law states that employers found paying less than the minimum wage will be subject to fines ranging from NT$20,000 (US$635) to NT$1.5 million, their names will be published, and they will be required to get in line with the regulations within a mandated time period.

Reactions

Reactions to the legislation among Taiwanese labor and industry groups varied ahead of its final passage on Tuesday.

The Taiwan Labor Front praised the legislation, saying in a statement that it would help move adjustments to the minimum wage in a more "reasonable, transparent and stable" direction.

Meanwhile, several other groups, including the New Kaohsiung Confederation of Trade Unions, Taoyuan Confederation of Trade Unions and Taoyuan Flight Attendants Union, said Tuesday that the law should require minimum wage hikes to be at least as high as CPI growth.

The Chinese National Association of Industry and Commerce, which praised the law for "normalizing" the adjustment process and making it more transparent, nevertheless called for industry representatives to be given a seat on the minimum wage research team.

Under the law, the research team is to include six scholars or experts -- four from the minimum wage review committee and two appointed by the government -- as well as one representative each from the MOEA, Ministry of Finance, NDC, Directorate General of Budget, Accounting and Statistics, and an unspecified "central government regulatory agency."

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