55% of manufacturers adversely hit by labor law

The China Post news staff

TAIPEI, Taiwan — Up to 55 percent of manufacturing businesses have been adversely impacted by the new “one fixed, one flexible” day off labor policy since it was put into effect two months ago, according a survey released Friday by 1111 Job Bank.

Sectors that have borne the brunt of the impact include food and beverage processing, metal processing and textiles manufacturing. Most of the polled manufacturers hoped the government would amend the labor holiday policy in a way that allowed them greater flexibility in manpower management and utilization, so as to effectively cushion adverse impact of the policy.

The polled firms said that to achieve the goal, the government should relax the 46-hour restriction on monthly overtime hours, reduce overtime pay, and exempt employees who volunteer to work overtime from the “one fixed, one flexible” day off rule. Sharp Increase in Overtime Pay Respondents said the new labor rule had sent their overall personnel costs surging sharply, mainly due to a large increase in overtime wages and the cost in recruiting additional workforce. In addition, they said they were having difficulty scheduling work shifts. The poll indicated that up to 93 percent of the respondents impacted by the rule said their personnel cost had surged since the implementation of the new holiday policy on Dec. 23, with their average personnel cost increase estimated at 9.1 percent.

Lee Ta-hua, vice general manager of 1111 Job Bank, said that some local manufacturers who had relocated their production lines abroad while still handling export orders in Taiwan were less affected by the new holiday law. By contrast, those still engaged in labor-intensive manufacturing operations in Taiwan have been severely impacted, with personnel costs shooting up drastically, Lee said. It’s no wonder that some labor-intensive manufacturers have claimed to remove their production operations to some Southeast Asian countries, where labor cost is comparatively lower, to counter the implementation of the new labor regulation, Lee said. Big Headache Lingers For enterprises that usually rely on employee overtime to meet increased manpower demand on holidays, as well as for workers seeking to gain more income from overtime pay, the “one fixed, one flexible” day off policy is a big headache, according to Lee.

Lee said the problem would linger until employers and employees reached a consensus on how to balance their needs.