Monday, January 2, 2017

Unions give nod, bosses slam new rule on levy

 Malaysia will lose out on some RM5 billion now that employers have to pay the foreign worker levy and not deduct it from the worker’s pay, the Malaysian Employers Federation (MEF) has said.
Speaking to FMT, executive director Shamsuddin Bardan said: “Before this, foreign workers would pay for their levies. Now that employers have to pay them, the foreign workers will remit the extra money saved back home.

Yesterday, Deputy Prime Minister Ahmad Zahid Hamidi said employers will now be responsible for paying the levy of their foreign workers.
Shamsuddin responded: “That means RM5 billion is likely to be remitted back to their respective countries. Unlike local employers who spend money in the country, foreign workers will not, so it is a loss to the local economy.”
He said that an estimated RM33 billion was remitted out of the country by foreign workers in 2016.
He also said he was concerned that the government intended to increase security deposits for foreign workers and impose higher standards for housing for foreign workers.
“In the past, the government made these commitments to comply with the Trans Pacific Partnership Agreement (TPPA).
“Now that United States president elect Donald Trump wants to ditch the TPPA, there is no corresponding benefit to employers to incur additional costs.”
Shamsuddin said that at present, the ability of businesses to pass on costs to consumers was limited due to an increased price of goods but if costs go up, businesses would have little choice but to increase prices of goods and services.
He also said he could not understand the government’s rationale of having employers pay for levies to discourage and prevent foreign workers from running away.
“The foreign workers may still run away and this is a cost to businesses, especially in these challenging economic times.
Meanwhile, Malaysian Trades Union Congress secretary general J Solomon welcomed the move to make employers pay the levy, adding it was now crucial for the authorities to enforce the policy.
He said the authorities must take action against employers who sought to recover the levy from their foreign workers.
He also called for authorities to ensure foreigners were housed properly and in comfortable and clean hygienic environments to avoid them from developing fatal illnesses or diseases.
“MTUC hopes the government can revisit the idea of putting all foreign worker matters under the sole jurisdiction of the human resources ministry so that International Labour Standards and recommendations of international labour organisations can be managed by a tripartite body consisting of the government, employers and workers.”

While MTUC approves of bosses being made to pay levy for foreign workers, employers' group says RM5 billion will leave the country

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