Social welfare migrant workers to be left out of minimum wage hike

The income of social welfare migrant workers remain stagnant due to the decoupling from the Labor Standards Act.(photo courtesy/Two Islands Digital)

The Ministry of Labor (勞動部) announced on Tuesday that the minimum monthly wage will be raised by NT$200, from NT$23,800 to NT$24,000 starting next year, meaning that the hourly wage will increase by NT$2, from NT$158 to NT$160.

How will the slight salary adjustment affect migrant workers in Taiwan? Here’s an overview.

Industrial migrant workers

According to the National Development Council (NDC), there were around 456,000 industrial migrant workers in Taiwan as of the end of 2019, with the manufacturing industry accounting for the majority of these workers.

As the Labor Standards Act applies to industrial migrant workers, employers are required to apply for labor and health insurance for the employees, and their monthly wages, as well as hourly wages, is increased in accordance with the regulations.

According to a report of the Ministry of Labor from 2019, the average total wage of industrial migrant workers is NT$29,029, while the regular wage is NT$23,514, falling below NT$24,000. As a result, many migrant workers are expected to see benefits from the new policy.

Considering the fact that industrial migrant workers often work overtime, the increase in overtime pay could also potentially raise their actual wages.

Social welfare migrant workers

According to the NDC, there were 261,000 social welfare migrant workers in Taiwan as of the end of 2019, working as caregivers and domestic helpers. Due to the flexibility of work time required for the job, it is difficult to distinguish between on and off duty times.

As a result, except for Thai workers, the Labor Standards Act does not apply to social welfare migrant workers, leaving employment details such as wages and vacation days to employers and employees to decide, and execute it accordingly.

According to the Ministry of Labor, the stipulated monthly minimum wage for social welfare migrant workers is NT$17,000, which will not change according to the Labor Standards Act, and overtime pay is also calculated at a fixed amount of NT$567 per day. 

Therefore, social welfare migrant workers will not benefit from the raise. Instead, they are likely to see a slight decrease in their actual salary considering that the deductible health insurance premiums increase alone with the minimum wage raise.

Soaring Gap between Factory and Social Welfare Foreign Workers

As Taiwan’s minimum wage has been raised for four consecutive years, the wages of industrial migrant workers have also increased throughout the years, whereas the income of social welfare migrant workers has remained stagnant due to the decoupling from the Labor Standards Act.

As their minimum income has not been adjusted since 2015, the wage gap between industrial migrant workers and social welfare migrant workers continues to widen.

According to the Ministry of Labor’s 2019 salary survey report, the average total salary of social welfare migrant workers is NT$19,947, while the regular wage is NT$17,550. 

Labor rights groups and scholars have suggested that the government adjust their wages at the same rate as other laborers. By doing so, social welfare migrant workers can keep up with the pay level in Taiwan, without having to put excessive economic pressure on employers.