In an investigation published this October, three migrant workers at a Garmin factory in Taiwan said recruiters had forced them to sign documents falsely denying the mandatory fees they had paid to get jobs. Two reported that the recruiters threatened to retaliate and deport them if they disclosed the charges. These workers were making products for a U.S.-based electronics company.

The nonprofit Transparentem interviewed 24 workers at seven manufacturers operating in Taiwan and documented recruitment fees totaling $6,400 each. Compal, the laptop maker, and Garmin claimed they had long prohibited worker-paid fees. But they only reimbursed current migrant workers after investigators contacted them, and excluded former workers from compensation. Despite corporate promises, these exploitative charges continued.

These findings expose a blind spot in Taiwan’s economic diplomacy. Taipei and Washington should stop treating their technology partnership and Taiwan’s Southeast Asian labor relationships separately. Recruitment abuse threatens Taiwan’s Western market access and regional goodwill. Fair recruitment is just as integral to supply chain security as factory investment.

A framework for reform already exists. The February 2026 Taiwan-U.S. trade agreement compels Taiwan to prohibit worker-paid recruitment fees and related costs in manufacturing and fishing within three years of entry into force. Yet on October 6, Premier Cho Jung-tai said unresolved U.S. trade measures were delaying ratification in Taiwan’s legislature. Tariff negotiations cannot excuse delaying recruitment reform.

Taiwan’s Labor Ministry counted more than 910,000 migrant workers at the end of August, including approximately 100,000 lacking valid work permits. Among permit holders, 515,000 worked in manufacturing, with 127,000 of those in the electronics industry. These numbers reveal just how critical migrant labor is to Taiwan’s technology sector.

Rather than stopping at a recruitment fee, the brokerage system often continually exploits workers. Agencies abroad initially charge workers to secure jobs in Taiwan, and Taiwanese brokers then skim recurring service fees off worker bank accounts that they control. Taiwan also restricts migrant workers from changing employment, requiring extensive paperwork and official authorization. Debt and restricted mobility thus reinforce each other.

My fieldwork has revealed what is at stake. In May 2024, I interviewed a Filipino worker at a Hsinchu semiconductor supplier. The worker described 12-hour night shifts, six days a week, and a broker who deducted fees from her wages. Only Catholic missionaries and more experienced migrants offered the worker reliable support.

While debt alone does not establish forced labor, the International Labor Organization (ILO) recognizes debt bondage as an indicator of it. For a worker still repaying heavy recruitment fee loans, the cost of reporting abuse could be exceptionally high. Losing their job could not only force them to default on the loan that secured it, but also threaten their family’s very livelihood. Such fear of whistleblowing also makes buyers and regulators less aware of actual factory conditions.

The commercial consequences are stark. In September 2025, U.S. Customs and Border Protection detained imported Giant bicycles and related products manufactured in Taiwan over forced labor concerns. Giant subsequently expanded recruitment fee reimbursements. By September 2026, companies comprising over 80 percent of Taiwan’s bicycle exports had joined an industry human rights initiative. Customer access restrictions accelerated reform.

Electronics manufacturers should take notice. The European Union will automatically block products made with forced labor by December 2027. Exporters will soon face significant overseas scrutiny and potential import bans. Continued broker charges could then lead to shipment delays and loss of customer trust. Taiwanese electronics firms cannot continue offloading their due diligence responsibilities.

The diplomatic stakes are just as important. Launched in 2016, Taiwan’s New Southbound Policy promised a “people-centered” partnership with its Southeast Asian neighbors through trade, education, and closer social ties. The Philippines, Vietnam, Indonesia, and Thailand are key partners in that initiative; they are also the home countries of virtually all migrant workers in Taiwan. With the world’s lowest birth rate, Taiwan’s reliance on Southeast Asian workers will only grow. Since Taiwan has no formal diplomatic relations with any of these countries, properly treating their migrant workers is especially important.

Taiwan’s electronics sector would particularly benefit from improved ASEAN-Taiwan relations. Filipinos account for nearly 83 percent of migrant permit holders across electronic components and computer, electronics, and optical manufacturing. Properly treating Taiwan’s Filipino workers is thus integral to sustaining the U.S.-Taiwan technology relationship. 

Recruitment costs have already generated bilateral friction. In 2020, Taiwan’s Labor Ministry rejected Indonesia’s demand that employers cover recruitment expenses and said it would consider recruiting elsewhere. In February 2026, the Philippines’ envoy in Taipei suggested Taiwanese authorities crack down on exploitative brokers and encouraged direct hiring. These governments want Taiwan to treat their citizens better.

While worker exploitation may not determine an ASEAN government’s policy toward Taipei, it can definitely sabotage Taiwan’s New Southbound Policy. Taiwan cannot credibly offer a people-centered partnership with ASEAN countries while exploiting their citizens’ labor. Protecting these almost 1 million migrant workers would thus strengthen the New Southbound Policy much more than limited business delegations or university exchanges.

Labor reform stalls partly because its beneficiaries lack political influence. Migrant workers diffusely spread all over Taiwan cannot vote, while concentrated employers and brokers can organize to defend their interests. A petition against employer-paid recruitment drew 5,929 endorsements. The Labor Ministry rejected demands to halt the planned ban, but such opposition reveals why external pressure is so helpful for reforming Taiwan’s migrant labor system. When access to export markets requires reform, employers are more incentivized to remedy an exploitative recruitment model they previously embraced.

Not all hope for internal reform is lost. Just on October 2, Labor Minister Hung Sun-han described preparations to end certain overseas recruitment charges from the end of 2026 into 2027.  The challenge is turning those promises into actually enforceable protections.

Opponents rightly point out that recruitment costs money. Someone must screen applicants, process visas, arrange travel, translate contracts, and resolve disputes. Small factories cannot operate their own overseas recruiting offices. So banning worker-paid fees alone would simply push them underground. Policymakers must more narrowly focus on freeing workers from broader recruitment burdens.

However, there are successful examples of alternative models. On September 14, Taiwan welcomed 35 Indonesian hotel workers into its first foreign skilled hospitality worker program. Indonesia’s representative to Taipei celebrated the program, stressing that employers paid all associated recruitment expenses. Fairer hiring thus directly contributes to more diplomatic goodwill toward Taiwan.

Taiwan should align with ILO principles in having employers cover all recruitment and related costs throughout the hiring chain, including payments abroad. Beyond simply promising reimbursement, Taiwan should ensure that these workers do not have to advance the money. Otherwise, workers may still have to borrow money and wait for a nebulous reimbursement. 

Taiwan should also block brokers from leveraging wage deductions to evade recruitment fee bans. Workers who document prohibited payments should receive restitution from their employer, which should be obligated to sanction the responsible recruiter.

But Taiwan cannot wait for its ASEAN partners to crack down on local agency fees. Taiwan should provide temporary transition funding to smaller suppliers, along with separate financial aid for low-income families to hire migrant household caregivers. These measures would help relieve immediate employer cost concerns.

In addition, Taiwan should make direct hiring more compelling. Taiwan’s Direct Hiring Service Center already assists firms with worker selection, applications, and multilingual services. But for employers to actually use these services, direct hiring must be as fast and reliable as their brokerage competitors. Alongside improving direct hiring services, Taiwan’s Labor Ministry should more regularly audit private brokers.

Taipei should engage the Philippines, Vietnam, Indonesia, and Thailand on fee ban enforcement. Taiwan could strengthen these critical ASEAN relationships through shared fee disclosures, joint recruiter investigations, and more accessible reporting channels. Migrant workers and their advocates should help shape enforcement measures. Those running Taiwan’s industries should also have a stake in their governance.

Finally, workers in Taiwan must be able to leave. Workers should be allowed to change employers if faced with coercion, wage theft, or unsafe conditions. Labor Ministry investigators should confidentially interview these reporters outside their workplaces and in their own languages. Additionally, Taiwan should work toward making work permits transferable within certain sectors. Otherwise, migrant workers would be perpetually vulnerable to potential employer coercion.

Washington should backstop these changes. U.S. officials could monitor fees repaid and mandate anti-retaliation requirements into subsequent trade agreements. Furthermore, U.S. buyers should bake fair recruitment conditions into Taiwanese supplier contracts and help shoulder remediation costs.

Congress and the administration should also mandate that new semiconductor subsidy recipients and their suppliers fairly recruit. Juggernauts like TSMC could thus pressure their vendors to improve migrant labor conditions. After all, federal procurement contracts already include an anti-trafficking clause that prohibits contractors and subcontractors from charging recruitment fees. Incremental funding releases should reward worker repayment and compliance while punishing continued violations. Domestic grants, tax incentives, and purchases could thus further the Taiwan-U.S. trade agreement’s labor provisions.

Some may argue that protecting Taiwan from China is more important than strengthening Taiwan’s labor laws. But detaining Taiwanese exports and alienating Taiwan’s essential migrant workforce weaken the island’s industrial base. Taipei is better off preemptively strengthening its own labor laws than letting customs officials and overseas customers set them.

Still, U.S. customers should avoid broadly abandoning Taiwanese suppliers, which may leave more workers jobless and indebted. Instead, buyers should encourage worker repayment while selectively punishing companies that conceal abuse.

Taiwan should not have to choose between resisting coercion abroad or confronting it in its labor market. Washington should help it do both. Beyond simply protecting Taiwan’s chip factories, preserving Taiwan’s democracy requires defending the freedom of the people inside them.