Established in 1992, Taiwan’s Employment Service Act (就業服務法) introduced a licensed brokerage system that can contract and regulate blue-collar workers from Southeast Asia as a response to labor shortage.

The law grants private brokers an outsized power over foreign workers who are looking to move to Taiwan for a better wage to support their families back home. Not only do they charge migrant workers for matching them with Taiwanese employers, but they also demand a recurring monthly payment for services that many say do not exist.

For migrant workers, working in Taiwan comes at the cost of running up debts during the early years of their stay. The amount they owe the brokers can be up to NT$200,000 (US$7,000), a researcher at Taiwan International Workers' Association points out.

While it is not uncommon for employers to illegally cut wages or delay payments, these middlemen often fail to step up for the workers. What is worse, they can charge an extra fee for helping them switch to a new employer.

In 2016, Tsai Ing-wen’s administration amended the Act to ban the practice of charging additional fees, vowing to shut down and fine agencies that violate the law. But it did not stop these actors from lining their pockets on the backs of workers.

Equality for foreign workers

Taiwan’s brokerage system has left around 800,000 migrant workers socially and economically precarious, but this is not the only reason to call for abolition.

移工遊行登場 盼廢除私人仲介

Photo Credit: CNA

Migrant workers from Indonesia, Vietnam, and the Philippines stage a demonstration to demand the abolition of the labor brokerage system and the enforcement of a direct-hire scheme in Taipei, Taiwan, December 8, 2019.

All types of foreign workers fill job vacancies that are usually unfulfilled by the local labor pool. They also contribute to industry and the economy in ways distinct from their Taiwanese counterparts.

But the discrepancy in how foreign professional and blue-collar workers are recruited to the country is appalling. The government has been proactive in attracting those who fall in the former category, which includes technical workers, business executives, and independent artists. Only the latter, which are essential workers like caregivers, domestic helpers, and fishermen, are assigned private brokers.

Without migrant workers doing jobs characterized as dirty or dangerous, thousands of factories will stand idle, fishing boats will be left ashore, and families might have difficulty providing the care that their elderly members need. With Taiwan’s birth rate declining and population aging, migrant workers’ participation in the local labor market will only become more indispensable.

The government should launch a blue-collar hire scheme that equates the hiring practice of foreign professionals. Equally important is to extend labor law protections by granting foreign workers legal status as domestic labor.

Direct-hire scheme: How South Korea does it

A reference for Taiwan may be South Korea’s Employment Permit System, built on government-to-government trade agreements between Korea and 16 developing countries, including China, Vietnam, Cambodia, and the Philippines.

Taiwan already has a similar system in place with countries like the Philippines, allowing employers to bypass brokers and hire migrant workers directly. But since it is not compulsory, most of them still turn to brokers to avoid the cumbersome paperwork and bureaucracy.

Like Taiwan, South Korea experienced an economic boom and brought in blue-collar workers in the 1990s with the Industrial Trainee Scheme.

Under the Scheme, private agencies recruited migrant workers for local businesses as “trainees” on a two-year contract. Trainees, not recognized as “workers” according to the law, were overseen by the Korean Federation of small and medium enterprises and were not protected by labor laws.

住宅商辦擬開放營造業移工 勞團反對(3)

Photo Credit: CNA

Migrant workers protest against a proposal for employer-provided housing, saying that it's a boon for brokers and a distraction from more pressing needs like fair compensation, in Taipei, Taiwan, September 29, 2020.

Employers cut wages and extended working hours as they liked, while workers either acquiesced for fear of losing their jobs or fled and went undocumented. Similar to what happened in Taiwan, migrant workers were often forced to overstay to pay off debts they owed to private brokers.

In 2004, as calls for reform grew, Korea’s Ministry of Labor introduced the Employment Permit System (EPS) and it replaced the scheme three years later.

The System allows the Korean government to decide the quota on employment-based immigration and include it in the bilateral agreements with its foreign counterparts. A state-run agency in each country is responsible for screening the workers based on language proficiency and other requirements like age and education.

Aligning with the International Labor Organization’s recommendations, the new program is said to have increased the transparency in the recruitment procedure and reduced the total number of undocumented workers, a study shows.

A major boon is that it relieves the financial burden for migrant workers who used to owe months of their hard-earned pay to the brokers.

While it gets rid of the middleman, the program is far from perfect, widely criticized for giving the employer too much power and leaving the employed vulnerable to human rights abuses. For example, workers are only allowed to change jobs with their employer’s consent or if they can present evidence that they are mistreated.

What Taiwan can learn from South Korea, though, is its willingness to take on the responsibility for migrant worker recruitment and work towards changing a system that harms a vulnerable population.

TNL Editor: Daphne K. Lee, Nicholas Haggerty (@thenewslensintl)

If you enjoyed this article and want to receive more story updates in your news feed, please be sure to follow our Facebook.