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Business groups in Taiwan worried about the minimum wage hike, could hurt several companies

Business groups have panned the minimum wage hike for 2022 proposed by a Ministry of Labor (MOL) committee, worried that it will hurt service sector companies hit hard by COVID-19.

The Minimum Wage Review Committee proposed that the minimum monthly wage be increased by 5.21 percent to NT$25,250 from NT$24,000 at present and that the minimum hourly wage go up by 5 percent to NT$168 from NT$160 at present, to take effect on Jan. 1, 2022.

Business groups felt the increase overshot the mark. Ho Yu, director of the Chinese National Federation of Industries, opposed the hike, especially given that the future course of the pandemic remains uncertain.

The 5 percent rise may have been linked to expectations of 6 percent GDP growth in Taiwan this year, but he said the projection overstates actual growth because it includes extra funding for COVID-19 relief measures, private sector vaccine purchases, and arms purchases.

Hsu Shu-po, chairperson of the General Chamber of Commerce, said the minimum wage increase will take a toll on the service sector, which has been losing money due to the pandemic and related restrictions.

Lin Por-fong, chairperson of the Chinese National Association of Industry and Commerce, said the wage hike's timing was poor.

The government is carrying out relief programs covering some 300,000 enterprises, and the number of workers on unpaid leave has remained stubbornly high, he said, and the increase will only make it harder for enterprises to operate.

But if the minimum wage is to be raised by 5 percent, then companies' contribution to employees' labor insurance premiums should be cut from 70 percent to 60 percent, he argued.

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