Why Taiwan is under increased scrutiny
There has been significant attention recently on forced labour risks in Taiwan across several industries. In September, the bicycle sector came under scrutiny when the U.S. issued a Withhold Release Order (WRO) against bicycles, parts, and accessories produced by Giant in Taiwan. The decision cited “reasonable indication” of forced labour, including alleged debt bondage linked to recruitment fees.
In December, Taiwan’s Textile Federation (TTF) introduced new responsible recruitment and employment guidelines for migrant workers in Taiwan’s textile mills, centred on the Employer Pays Principle (EPP). These guidelines require mills to implement policies ensuring workers are not charged recruitment fees and mandate that employers need to reimburse any workers who have already incurred such costs.
How recruitment fees arise in Taiwan’s labour system
Taiwan is a hub for migrant workers due to its aging population and shrinking domestic workforce. Today, around 800,000 migrant workers are employed in key sectors such as manufacturing and domestic care. Most come from Vietnam, the Philippines, Indonesia, and Thailand, with India emerging as a new migrant corridor.
For a Taiwanese company to hire a migrant worker, it usually engages a Taiwanese recruitment agency, which works with a counterpart agency in the worker’s home country. The origin country recruitment agency manages paperwork, medical checks, training, and travel, but all the associated costs are usually paid by the worker. Once in Taiwan, the local agency deploys the worker with the employer and charges a monthly fee for administration, translation, and ongoing support.
NGO reports estimate the average recruitment fee to Taiwan as being around USD 4,000-6,000, though it varies by origin country, labour recruiter, year of recruitment and sector. While some origin countries prohibit charging recruitment fees, workers often still bear hidden costs such as travel, accommodation, and pre-departure training.
The methods workers use to finance these costs significantly increase their vulnerability. Many rely on personal savings, loans from family, borrowing from lenders or banks, or taking loans directly from recruitment agencies or labour brokers, often at high interest rates. These practices frequently result in what the ILO classifies as debt bondage, a form of forced labour in which workers remain tied to their employer in order to repay recruitment-related debts.
Why this matters for businesses sourcing from Taiwan
It is important to recognise that forced labour–related business risks in Taiwan affect more than just the U.S. market, following the recent WRO against Giant. With the EU Forced Labour Regulation coming into effect in 2027, which explicitly includes recruitment fees and debt bondage as indicators of forced labour, the risks of products from Taiwan being detained or banned in the EU market will be present as well.
We recommend that companies operating in Taiwan, as well as international companies sourcing from Taiwan, take the following steps:
- Promptly assess whether their migrant workers have paid recruitment fees
- Engage a qualified third-party partner to support the accurate calculation of any identified fees
- Ensure transparent repayment of recruitment-related costs where fees are found
Taking these steps not only protects workers but also helps companies distinguish themselves at a time when sourcing from Taiwan is under heightened scrutiny.
How Enact can support
Enact recently supported a Taiwanese company through a Human Rights Impact Assessment focused on recruitment fees, including the calculation and repayment process. We would be happy to support your company in strengthening its human rights due diligence in Taiwan or elsewhere in its operations and supply chains.
For questions or further discussion, please contact us at info@enact.se.