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Who Paid the Recruiter? Taiwan's Migrant-Worker Fee Rules and the U.S. Chip Supply Chain

4 min read

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A hypothetical scene, no real company involved. A sourcing manager from a U.S. module maker is auditing a packaging-and-test plant in central Taiwan. The broker's invoices are tidy and within the legal caps. Then she asks a line worker from Vietnam, through an interpreter, what the job cost him. He names a figure in U.S. dollars, paid to an agency in Hanoi before he had seen Taiwan, and the loan that covered it. Nothing in the Taiwan file is illegal. The debt is real anyway.

That kind of debt is one reason a bicycle company landed on American sourcing agendas. On September 24, 2025, U.S. Customs and Border Protection issued a withhold release order on bicycles and parts made by Giant Manufacturing in Taiwan, citing information it said reasonably indicated forced labor, debt bondage among the five indicators listed (CBP release). Such an order rests on a reasonable indication, not a finding of guilt. Giant said it had reimbursed all current migrant workers' recruitment fees by December 1, 2025 (Escape Collective); trade press reported the order still in place in August 2026 (Bicycle Retailer). The fee an auditor needs to find is the one no Taiwan invoice shows.

What a Taiwan broker may lawfully charge today

The Employment Service Act bars private employment agencies from taking any fee beyond the published standards (Article 40, paragraph 1, item 5). For factory, construction, fishing and care workers, those standards let a Taiwan agency collect from the worker only a monthly service fee, capped at NT$1,800 in the first year, NT$1,700 in the second and NT$1,500 from the third, never in advance (Fee Standards for Private Employment Service Institutions, Article 6). A placement fee, generally capped at the first month's salary, exists only for professional categories (Article 5); the standards were last amended on April 6, 2017.

Taiwan's Ministry of Labor said in September 2024 that Taiwan therefore already prohibits its brokers from charging recruitment fees (Business & Human Rights Resource Centre). True, as far as it goes. The rules do not reach an agency in Hanoi, which is where the worker in the opening scene paid. Documents are the second pressure point: an employer may not unlawfully withhold a foreign worker's passport, residence permit or property (Article 57, item 8), and a broker may not retain documents against the worker's will (Article 40, items 3 and 10). "Against the worker's will" is the loophole the government now wants to close.

What the trade agreement would change, and when the clock starts

The Agreement on Reciprocal Trade signed on February 12, 2026 commits Taiwan to an import ban on forced-labor goods that recognizes U.S. determinations under 19 U.S.C. § 1307, to a legal ban on holding workers' passports and similar documents, and, within three years of entry into force, to prohibiting recruitment fees and related costs for manufacturing and fishing workers, including, where applicable, costs charged before migration; employers may pay those costs during the contract period (agreement text, Article 3.9). It takes effect the day after the second side notifies that its internal procedures are complete (Article 7.5). A U.S. Federal Register notice of May 28, 2026 said it had not yet entered into force (notice), Taiwan's Executive Yuan has said the legislature must approve it (CNA, January 27, 2026), and as of October 5, 2026 no notice of entry into force turned up. On the public record, the three-year clock has not started.

Taiwan has moved anyway. The Cabinet approved amendments on April 9, 2026 that would ban employers and brokers from holding workers' documents in any circumstances or taking deposits (Executive Yuan); as of June 22, 2026 the bill was in the legislature awaiting committee review (industry report). The fee rule is not in that bill (Taipei Times). The Ministry of Labor says it plans separate amendments requiring manufacturing and fishing employers to pay overseas recruitment costs, with a three-year transition and household employers excluded; as of July 28, 2026 it had not said when it would submit them, and on July 27 it rejected a petition from a household-employer group against the plan by pointing to the agreement (Focus Taiwan). Voluntary ministry guidelines dated February 13, 2026 turn the ILO's eleven indicators into a risk self-assessment form mapped to Taiwan's Labor Standards Act and Employment Service Act, plus a summary of what RBA, SA8000 and SMETA audits cover (Ministry of Labor).

Where the fee shows up in a supplier contract

A Taiwan supplier can comply fully with Taiwan law and still carry the indicator CBP cited. The useful questions concern pre-departure costs in the home country, loans and payroll deductions, where passports are kept and under what "consent," and whether the broker's monthly fee is taken in advance. A supplier code that says "no recruitment fees" without naming the offshore leg is a sentence, not a control.

Contract language can track both the current law and the scheduled one: a representation on current Taiwan fee caps and document rules, an employer-pays commitment for new hires that phases in ahead of the three-year deadline, worker interviews without the broker present, and reimbursement as the remedy rather than a termination that leaves the worker holding the debt. Under Section 307 it is the importer whose shipment is detained (CBP release), and a CBP spokesperson told Bicycle Retailer that modifying an order requires clear evidence of full remediation.

The worker in the opening scene paid for his job. Taiwan's rules say his Taiwan broker could not charge him a placement fee; the trade agreement says that, within three years of taking effect, Taiwan must bar anyone in the chain from charging him one. Until then, the number he quoted to the auditor is the one that matters.

For questions about supplier agreements, broker arrangements and labor audits in Taiwan, contact Attorney Wei Tseng (曾雋崴), a partner at Hovering International Law Firm: wei@hoveringlaw.com.tw. Please send only a non-confidential outline initially. Taipei office: 7F-2, No. 35, Sec. 1, Chengde Rd., Datong Dist., Taipei City 103, Taiwan. Taichung office: 6F-1, No. 19, Guanqian Rd., North Dist., Taichung City 40453.

More columns for semiconductor companies

Sources

All sources checked on October 5, 2026 (KST). Statements of Taiwan law follow the official Chinese text; the Ministry of Justice also publishes an English translation of the Employment Service Act.

General information, not individualized legal advice. Sources checked October 5, 2026 (KST).

Frequently Asked Questions

Does Taiwan law already prohibit recruitment fees for migrant workers?
Partly. A broker in Taiwan may charge a factory, fishing or care worker only a monthly service fee capped at NT$1,800 in year one, NT$1,700 in year two and NT$1,500 from year three, never in advance, and no placement fee. Fees charged by agencies in the worker's home country before departure are outside those rules. The U.S.–Taiwan Agreement on Reciprocal Trade would require Taiwan to prohibit charging recruitment fees and related costs to manufacturing and fishing workers, including, where applicable, pre-departure costs, within three years of entry into force. As of October 5, 2026, public records checked show the agreement signed but not yet in force.

This article provides general information and is not legal advice on any individual matter.

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