For an economy to grow, laws and regulations should reflect the reality of business environments and needs. In today’s rapidly evolving world of work, Taiwan faces two critical challenges: adapting to global market demands to boost competitiveness and addressing labor shortages in the hospitality sector, where industry demand has outgrown domestic supply.
The post-pandemic work environment includes many non-traditional models, including digital nomads, remote workers, international cross-team collaboration, and the gig economy. In this new era, Taiwan’s labor laws – originally crafted for factory work – are sometimes counterproductive for efficiency and employee wellbeing.
The rigidity of the Labor Standards Act (LSA) in its current form hampers Taiwan’s ability to attract global talent, especially in areas such as working hours, labor contracts, insurance, and pensions for foreign employees. Establishing a public-private task force for adapting labor regulations to the evolving world of work would help ensure that new regulations align with the realities of today’s business environment in Taiwan.
The task force could focus on creating working hour flexibility and aligning regulations to accommodate the requirements of global communication. In addition, less rigidity is needed in rules on shift arrangements and overtime limits, particularly in industries where effectiveness requires more flexibility. Pension program restructuring also needs to be addressed, and offering incentives would encourage the hiring of foreign talent to enhance diversity and spur innovation.
An area calling out for urgent attention is the serious labor shortages in the hospitality sector. Staffing issues in this industry have a detrimental impact on service quality and cause prices to rise, potentially damaging Taiwan’s reputation as a tourist destination. Beyond its potential impact on GDP growth, this issue undermines Taiwan’s efforts to position inbound tourism as a source of soft power.
The challenge in hiring sufficient personnel highlights a disconnect between the industry’s needs and the preferences of domestic job seekers. For many Taiwanese, especially the younger generation, jobs in the hotel sector are no longer attractive. As a result, the hospitality industry is estimated to have a labor shortage of around 8,000 workers.
It’s encouraging that the government is considering further opening the borders for basic staff in the hotel and hospitality sector. Allowing foreign workers to fill entry-level positions could mitigate labor shortages, elevate service quality, and contribute to the internationalization of Taiwan’s tourism and hospitality sectors.
An additional positive step would be to expand Taiwan’s working holiday visa program. Taiwan has implemented such programs with several Western countries, as well as Japan and South Korea. However, because the minimum wage in these countries is higher than in Taiwan, an average of only 1,300 foreign nationals per year applied to come to Taiwan on a working holiday visa between 2017 and 2019. In Taiwan’s case, it would make sense to extend these opportunities to students and young people from Southeast Asian countries.
