KUALA LUMPUR – The Malaysian Employers Federation (MEF) has urged Prime Minister Datuk Seri Najib Abdul Razak (pix) to intervene in the foreign worker levy issue, which requires employers to pay a new quantum effective Jan 1.
Its Executive Director, Datuk Shamsuddin Bardan, said nearly all industries were unhappy over the decision forcing employers to pay the annual levy for foreign workers as the government did not discussed it with them before enforcing it.
“This policy is a surprise and we do not see it benefiting the economy. It is not business-friendly and the announcement was made within a day, without any engagement with industry players and (a) grace period (given).
“We do not agree to this policy because the cost will not only impact us, the employers, but the consumers as well,” he told reporters after a joint meeting with 159 industry players here today.
He said the industries’ need for foreign workers was crucial as it was a human resource need which could not be filled by the locals.
“The industries which usually employ foreign workers are the ones that our local people avoid.
“That is why employers have no choice but to resort to foreign workers to meet orders by clients,” Shamsuddin said, adding that the documents and letters on the issue would be submitted to the prime minister today.
Meanwhile, the SME Association of Malaysia National President, Datuk Michael Kang Hua Keong, said the association opposed the decision because employers would face more risk of losing legal foreign workers.
“As this will incur additional cost to businesses to employ the legal foreign workers, more illegal ones will start to come in.
“Thus, the aim to manage foreign workers better through the move taken will not achieve its objective,” said Kang.
He said the industry players wanted the prime minister to look into the matter urgently and maintain the previous system, where levies were paid by the foreign workers from deduction of their wages.
In a separate statement, the Malaysian Iron and Steel Industry Federation said while it appreciated the government’s effort to reduce the number of cases of workers fleeing, working illegally in other sectors and overstaying, the alternative adoption of labour-saving processes through automation systems were not feasible this time due to the uncertain market conditions and weak ringgit against the US dollar.
Its President, Datuk Soh Thian Lai, said the industry has been going through a challenging business environment over the last couple of years.
“Passing on incremental cost to consumers would create an inflationary pressure on the consumer or further reduce the volume of business,” he said.
He added the unwelcome surprise like the Employer Mandatory Commitment (EMC) would erode the competitiveness and present a setback to the industry.
On Dec 31, 2016, Deputy Prime Minister, Datuk Seri Dr Ahmad Zahid Hamidi, made the announcement that employers would be responsible for paying the levy of their foreign workers.
He said the decision, enforced under the EMC, was to ensure employers were fully responsible for their workers from the time of their appointment to the time they returned to their countries.