Where are the Happiest Companies? Exploring the Salary & Violation of Labor Law Among Taiwanese Companies.

Preface

Employees maintains the longest long-term relationships with the company. Therefore, ensuring fairness in employee compensation and protecting their rights are essential parts of fulfilling corporate social responsibility (CSR). Employee issues involve multiple considerations, with particular attention given to the salaries of employees. This article will take you through the recent trends in salaries among Taiwan’s listed and OTC companies. Additionally, we will explore workplace safety and labor incidents that have occurred since this year, allowing you to examine the importance of employee welfare and the social dimension (S) of ESG in discovering sustainable companies.

Trends in Salaries among Taiwanese Companies

Since 2016, the Taiwanese government has consistently increased the basic salary for seven consecutive years. The aim is to enhance work efficiency by increasing the income of grassroots workers, taking care of their basic living needs, and stimulating domestic consumption expenditure and economic growth. In addition, the Financial Supervisory Commission (FSC) implemented regulations in 2018 that require listed companies to disclose data such as the average benefits and average salary expenses of non-executive full-time employees, as well as the EPS. The purpose is to ensure fair employee compensation.

With the support of relevant agencies, has there been growth in salaries among Taiwan’s companies in recent years?

Salaries of employees in Taiwan’s companies.
Salaries of employees in Taiwan’s companies. Source: Integrated from TESG Sustainable Dataset

According to the TESG Sustainable Dataset, the compound annual growth rate (CAGR) of EPS for Taiwan’s companies from 2018 to 2021 was 15.8%. With the increase in EPS, the average annual salary for all companies reached 1.171 million in 2021, with a CAGR of approximately 6.5%, showing stable growth. In 2021, due to the recovery from the pandemic and a significant growth in export markets, both EPS and salaries experienced significant increases. With a 41% growth in EPS, the total annual salary also grew by 14%.

However, among all industries, which industries contributed to the overall average salary of 1.17 million, and which industries lagged behind the average?

Industries and Companies with Best Salaries

Industries Compensation in 2021

Salaries of employees in Taiwan’s companies.
Salaries of employees in Taiwan’s companies. Source: Integrated from TESG Sustainable Dataset

Through the TESG Sustainable Dataset, we compiled the top ten and bottom five industries in terms of salaries in 2021 (as shown in chart 2). The highest-paying industry in 2021 was the semiconductor industry, with an annual salary of 1.646 million, approximately 250 thousands NTD higher than the second-ranked industry. Following that were the Iron & Steel industry (1.395 million), the financial industry (1.336 million), the Plastics industry (1.323 million), and the Shipping industry (1.317 million). It is worth noting that the average salary across all industries was 1.171 million. The salaries of industries lower than No.7 were lower than the industry average, indicating a significant wage gap between the middle class and industries with extremely high salaries.

The large wage disparity may be attributed to the impact of the pandemic on domestic demand industries, which experienced slow growth or even negative growth in 2021. This can be observed from the bottom five industries in the chart, where most of them belong to domestic demand industries. Among them, the Tourism industry had the lowest annual salary at only 529 thousands, followed by Agricultural science & technology (675 thousands) and Textiles (695 thousands) industries. On the other hand, the semiconductor industry tops all the industries with a salary of 1.65 million, which was more than three times higher than that in the tourism industry, indicating generous compensation in the semiconductor industry.

We have also listed the top ten companies in terms of salaries, let’s see who showcase the most outstanding performance in this aspect.

Top 10 Companies with the Best Compensation in 2021

Top 10 Salaries in Taiwan’s companies. Source: Integrated from TESG Sustainable Dataset
Top 10 Salaries in Taiwan’s companies. Source: Integrated from TESG Sustainable Dataset

Regarding average salaries, the top-ranking company is MediaTek, with an impressive annual salary of 5.15 million. It is followed by NovaTek (4.99 million) and ESMT (4.5 million). When considering the median salaries, the top three companies remain the same, with a slight change in rankings. ESMT takes the first place with a median salary of 4.33 million NTD, followed by NovaTek and MediaTek. It is noteworthy that out of these top ten companies, eight of them belong to the semiconductor industry, with only FTC (2354.TW) and Evergreen (2603.TW) being exceptions. Furthermore, upon closer examination, all eight semiconductor companies are IC design companies, highlighting the leading position of IC design firms in terms of salary compensation in Taiwanese companies.

2023 Violations in Workplace Safety & Labor Law

In addition to salaries, it is important for companies to ensure a non-violation of labor laws and a safe working environment for employees. TEJ has compiled data on the number of violations of labor law in 2023. The following is an explanation:

salaries: violations of relevant labor laws in 2023
Violations of relevant labor laws in 2023. Source: Integrated from TESG Sustainable Dataset
  • Violations of Safety-related Laws (60%): There have been a total of 146 incidents of violations of occupational safety-related laws, with the Building Materials & Cons. industry accounting for the most parts. Occupational safety is a significant aspect of employee concerns, as neglecting workplace safety can lead to physical and mental injuries, loss of work capacity, and even social problems in severe cases. A recent incident involving a crane piercing through a MRT is one of the examples. According to the TESG sustainability dataset, Highwealth (2542.TW), who is responsible for the accident, has violated occupational safety-related laws five times this year, indicating the insufficient attention for workplace safety.
  • Labor Law (34%): There have been a total of 84 violations of the Labor Standards Act this year, including failure to pay overtime wages, excessive working hours, and failure to pay wages for work on rest days. Apart from satisfying salaries, employees should also be concerned about whether employers pay their salaries on time or extending working hours is frequent. Some companies that have violated labor laws include Chunghwa Telecom (2412.TW), ASE global (3711.TW) and Taiwan Cement (1101.TW).
  • Retirement-related regulations, insurance protection laws, gender equality laws, others (6%): The remaining event types account for a total of 6%, with a total of 16 occurrences. The event types include failure to file retirement pensions on time (2%), failure to provide insurance coverage for employees (2%), workplace sexual harassment (1%), and other types (1%). Several well-known companies, such as 7–11 (2912.TW), Tatung (2371), and Shanghai AIDC (2634.TW), have violated relevant regulations and neglected employee rights this year.

Valuing Employee’s Right

In conclusion, employees are the most valuable assets of a company and a crucial strategic resource for sustainable development. While increasing salaries is one aspect, what truly matters is the emphasis on employee rights and well-being. Companies can provide fair salary systems, generous benefits, training and development opportunities, but they must not overlook the importance of workplace safety. By integrating these factors, companies can effectively attract, retain, and motivate exceptional talent. Lat but not least, it is essential to foster mutual growth with employees, thereby enhancing the competitiveness of the company and achieving sustainable development.

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