Using migrant recruiters and brokers is now an illegal practice.
In February, Le Monde Diplomatique published an investigative report that cited foreign guest workers at Taiwanese bike factories, including Giant, who said they had paid recruiters in their home countries fees of as much as $5,500 to secure work at the factories. Some workers also said that once in Taiwan they had to pay service fees to Taiwanese brokers that amounted to two months’ wages during their three-year contracts. The news source also found similar fees being paid by workers at Merida, Maxxis, Fritz Jou and other Taiwanese factories. It said Giant committed last year to paying the fees on behalf of the foreign workers.
It’s typical these days to pay a service fee (whether subscription or one-time upon hiring) to head hunters split between employer and employee for them to find you a job. I didn’t know it was illegal, maybe depends on country. Happens all the time in the US, you sign a contract for it first.
From the original report; these migrant workers are paying 1 year of wages upfront to the recruiters, which makes them indebted slaves. Giant still use these expensive recruiters presumably because they benefit from having slave workers.
Not that I think paying a year salary upfront is reasonable, but surely paying a broker is not out of the ordinary. Isn’t that how real estate agents make a living?
Making workers pay for their own hiring costs is anti-competitive:
700,000 migrants working in Taiwan pay $484m a year to Taiwanese brokers for services that elsewhere employers write off as human resource costs.
The brokers don’t actually provide any services to the workers:
Workers said they paid service fees to Taiwanese labour brokers amounting to two months’ wages during their three-year contracts. ‘It’s very expensive. We get no service, but cannot avoid paying,’ said a Vietnamese employee of Giant. Taiwan is one of the few places in the world where this is legal.
That is very strange… If I want a realtor to find me an apartment to buy or to rent, how can it be against the law to pay for a service I need (if I would have more money than time)
First arriving in Taiwan I used a company for finding me an apartment to rent. Helped me a lot
So if I land in Australia, the agent can only find me apartments where they have signed a deal with the landlord? They are not allowed to show other apartments? Very limiting
Yes, they don’t act as free agent. But it also means it is much more above board. Everyone applying for that tenancy is applying with the one agent. And also means viewing of the property can be done on a single occasion with all prospective tenants in attendance.
I had the same issue a year ago. I had to pull out finish goods production from Taiwan because of the practice of having foreign workers pay their own recruitment fees.
The issue was not US law but a violation of the International Labor Organization. Recruitment frees cross the line into forced labor once workers are not able to leave until the fees are paid (debt bondage).
Real estate agents in Australia doesn’t find you a property to rent. They list the properties they have available and organise for prospective tenants to view properties and accept applications on behalf of the Landlord… they work for the landlord not the Tenant.
Real Estate Agents and Recruitment Agents charging fees to tenants and employees respectively are merely passing the costs of landlords and employers onto tenants and employees it is unethical.
Giant should be made to sign up to the RBA (responsible business alliance). My company is a signatory. Our migrant labor is not allowed to pay dollar one in order to secure a position. We cover all fees arising including visa fees and airfares. The RBA audit includes anonymous interviews with workers to ask about any illegal and unethical practices such as salary diverted to pay agency fees.
Didn’t Giant start covering all fees involved last year after the Le Monde article?
If that’s the case, then what is the issue?
The Business & Human Rights Resource Centre, a nonprofit organization, published a 2024 report that found allegations of worker fees paid by Giant factory workers. The organization said that, when contacted, Giant did not acknowledge any violations but told the organization, “It is understood that some migrant employees pay recruitment fees to home-country recruiters, but our company is not involved in the negotiation and collection of such fees.”
According to Giant’s 2024 annual report, at the start of this year the company committed to paying migrant workers’ travel costs and arrangements including agency fees, regulatory fees, medical examination fees, visa fees, and passport fees. Once the workers are in Taiwan, Giant committed to pay costs including agency service fees, medical examination fees, residence permit fees, and passport fees.
I agree the old practice is not great, but it feels more like a shakedown to me.
You know the tenant is still the one paying in the end?
If I want to sublet my apartment for X dollar per month, but have to pay an agent 3 monthly rents (or any dollar amount) for him to find me a tenant. Then the rent, I rent it out for, has to cover that cost, so monthly rent is higher
In terms of market rent sure to a certain extent. But maybe not 100% for instance rental management fees are typically percentage of rent 5 to 12% taken from rent before it is provided to landlord… not a lump sum at the beginning. (Real estate agent collects the monthly/fortnightly rent organises repairs etc etc)
Also rental bonds (security deposits) are only 4 weeks rent in Australia… and held by the government or an authority authorised by the state government, not held by landlord (in most states).
And there are state tribunals to dispute withholding bonds at end of tenancies too. (Before landlord gets the money).