KUALA LUMPUR: Manufacturers have expressed shock over the sudden implementation of the Employer Mandatory Commitment (EMC), which requires that employers pay their foreign workers’ levy.
“There was no dialogue or discussion on the EMC and when it would be implemented,” said Federation of Malaysian Manufacturers (FMM) president Tan Sri Dr Lim Wee Chai.
All along, the FMM has urged for a consultative approach on changes to government policy which would result in an immediate cost impact to manufacturers, he said.
According to the Statistics Department, the manufacturing sector, as a key economic driver, contributed RM626 billion in 2015. Manufacturing accounts for half of the country’s RM1.16 trillion economy and more than 80 per cent of its RM780 billion in total exports.
“This decision should have been made in consultation with relevant stakeholders and (the ruling should be) gradually implemented, with a grace period before it comes into force,” Lim told the New Straits Times.
As it stands, there are unresolved issues on foreign workers, with companies still facing delays in getting approvals to hire them.
Manufacturers reiterated their appeal to the government to adopt a more comprehensive and consistent approach in its foreign worker policy.
“This levy payment will cost Malaysia more than RM4 billion per year and this amount will be transferred out from Malaysia,” Lim said in a telephone interview today.
“With the weak Ringgit, the RM4 billion will be an added burden and pressure on doing business in Malaysia,” he added.
Lim said the FMM is requesting an immediate dialogue between the Home Ministry and the manufacturing industry.