The education ministry has banned a university from enrolling international students next academic year after students at the school reported abuses.
The move on Friday comes after a group of Filipino students enrolled in a work-study program at Kao Yuan University in southern Taiwan complained to the ministry.
Taiwanese law limits international students to working 20 hours per week, but the students reported working double that time.
School officials were also recorded instructing the students to tell authorities they were working only 20 hours per week. Some students also reported irregular payments.
The ministry added that it will reconsider grants and subsidies dispersed to the school.
The controversy is just the latest in a series of scandals involving international students. In January, authorities discovered that another university was forcing Ugandan students to work in factories for more than 10 hours a day. And in 2018, yet another university was punished for asking Sri Lankan students to work illegally in slaughterhouses.
The education ministry says it is carrying out surprise inspections to stop universities from exploiting international students.