Taiwan Labor Ministry's Brokerage Evaluation Sparks Concern

Taiwan Labor Ministry's Brokerage Evaluation Sparks Concern
Credit: Lennon Ying-Dah Wong / STP
Why you need to know

The labor agency's yearly assessment of migrant worker broker firms is underway, but a recent protest has renewed sentiments that the brokerage system is unethical by design.

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On Monday, Taiwan’s Ministry of Labor (MoL) began its annual evaluation of the country’s migrant worker brokerage firms. In the wake of its rollout, activists and workers have raised questions about the efficacy of the assessment.

These concerns were punctuated by a Monday night protest by hundreds of Vietnamese workers in New Taipei City, who stood outside into the early morning hours to demand that their broker stop charging exorbitant fees for basic services. This broker was graded in the MoL’s last assessment as being highly reputable.

The MoL pledges to evaluate Taiwan’s 1,471 brokerage firms, which manage and provide services to the bulk of Taiwan’s approximately 600,000 migrant workers, on their performance in providing client services, responding to worker complaints and managing “runaway” worker cases. Penalties are levied by the MoL for recorded violations of the Employment Service Act (就業服務法).

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Credit: Lennon Ying-Dah Wong / STP
Migrant workers rally in Taipei against revisions to Taiwan's Labor Standards Act (LSA) in December. Protesters argued that for migrant workers, the LSA acts as a ceiling rather than a floor.

In its evaluation of brokers, the MoL scores each brokerage out of 100, assigning a grade of A (90 or higher), B (70 to 89), or C (below 70). The data is publicly available to current and prospective workers, though the website is only available in Chinese. Most of Taiwan’s foreign workers come from Vietnam, Indonesia, and the Philippines and relatively few are proficient in reading Chinese characters.

For a migrant worker, the grading system is “not helpful to know how good or bad a brokerage company is,” Jing-ru Wu (吳靜如) of the Taiwan International Workers Association (TIWA) told The News Lens. The evaluation overlooks individual complaints that are not formally reported and relies on the testimony of workers who may be afraid to speak out against their broker, she said.

Full abolition of the brokerage system, stemming from continued financial exploitation by the third-party agencies, has long been demanded by migrant worker advocacy groups, but the call was echoed by the U.S. Department of State’s yearly Human Rights Report for Taiwan, released last Saturday, which said that high fees commonly charged by brokers leave workers “vulnerable to debt bondage.”

Trustworthy?

On the night of April 23, about 300 Vietnamese women protested outside of their dormitory in New Taipei City. The protesters were upset about the myriad fees being deducted from their monthly salaries by their brokerage firm, which manages their employment contracts and their accommodation. These deductions brought their monthly salaries well below the national minimum monthly wage of NT$22,000 (US$740).

In this case, the women complained that they pay NT$400 per month for electricity – despite living in a dormitory which houses over 400 workers – yet the air conditioning frequently malfunctions in the increasingly hot weather.

A source told The News Lens the brokerage charges every occupant of the dormitory a total of NT$1,800 per month in “service” fees, administered for things such as use of laundry machines and hairdryers. These fees are charged on top of expenses for food and accommodation, labor and health insurance, tax, and debts paid to their Vietnamese brokers which can reach US$500 per month.

Workers staying in the dormitory had already complained to the brokers several times, but had received no response, the source said.

The News Lens confirmed that the brokerage managing this dormitory is 守信人力 (Shou Shin Manpower) – Shou Shin translates to “Trustworthy.”

In a business landscape riddled with fly-by-night operators and accusations of misconduct, Shou Shin is considered to have a sturdy reputation. The firm has operated as a licensed brokerage in Taiwan since 1992 and has satellite offices in Kaohsiung, Taichung, and Tainan.

In the MoL’s last brokerage evaluation report – released in October 2017, and surveying brokerage compliance in the 2016 calendar year – Shou Shin received a cumulative score of 96.54 out of 100, earning an A grade.

Shou_Shin_(1)
Credit: Ministry of Labor
The Ministry of Labor's latest evaluation scores for Shou Shin Manpower, which earned 'A' grades for its overall management, service to foreign workers, and absence of Employment Service Act violations, receiving an overall score of 96.54 out of 100.

Monday’s protest was quelled when Shou Shin pledged to hold talks with workers and employers. Brokers often attempt to resolve conflicts without the presence of MoL officials or NGO representatives, said Lennon Ying-Dah Wong of Taoyuan-based Serve the People Association (STP).

“Even when [NGOs] complain, brokers and employers often try to intimidate the workers or persuade them to accept” their settlement offer, Wong said. “They know it’ll be more complicated, and out of their control, if the labor officers or NGOs intervene.”

A Shou Shin representative declined to comment, telling The News Lens the agency is not taking press inquiries.

Running on Borrowed Time

Although the MoL trumpets its control over third-party brokerage firms like Shou Shin, there have been increasingly audible calls from migrant workers, activists, and NGOs to abolish Taiwan’s brokerage system entirely.

“We’ve been pushing for direct hiring, which Korea does,” Wu said. “The government of Taiwan is avoiding this.”

South Korea, like Taiwan, is a highly popular destination country for Asian migrant workers. In 2004, Korea introduced its Employment Permit System (EPS), a centralized direct hiring scheme which directly matches the influx of foreign workers to the needs of the market. About 275,000 workers are currently employed on the EPS.

The EPS “has decreased the recruitment costs of migrant workers by eliminating the role of recruitment agencies” in Korea, according to a report by Singapore nonprofit Transient Workers Count Too (TWC2). Migrant workers in South Korea are still regularly mistreated by employers, but TWC2 concludes that removing brokers from the equation constitutes a positive step.

The report notes that, before the implementation of EPS, “there were issues with exorbitant recruitment fees, meager wages and poor working conditions” – problems which remain endemic among Taiwan’s foreign workforce.

“Fees and debt have always been the biggest burden,” Wu said. “The Taiwanese government knows this very well.”

The MoL has promoted its own Direct Hiring Service Center (DHSC), which has operated for 10 years and launched online at the start of 2018. Companies such as I-Mei Foods have utilized the DHSC to recruit overseas workers. Workers hired via the DHSC are spared hefty brokerage fees and are contracted solely to their Taiwanese employer.

However, the DHSC still operates as a complement, rather than a replacement, to the existing third-party brokerage system. In the U.S. Department of State report, TIWA was cited as complaining that “after 10 years of DHSC operation, the government was still unable to complete the direct recruitment objective for foreign workers. Red tape in the system continued to enable brokers to exploit profits from foreign workers.”

Without unprecedented action, this pattern looks poised to continue, and past evaluations by the MoL have seemingly done little to quell the malfeasance of Taiwan’s migrant worker brokerage agencies.

Wu is afraid that, if anything, the MoL evaluation legitimizes the mistreatment of workers by their brokers. “These kind of evaluations,” she said, “make brokers control the workers more.”

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Editor: David Green

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