PUTRAJAYA: As much as RM5 billion could be sapped from the Malaysian economy every year if employers are required to pay the levy for hiring foreign workers.
Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said he believed the new requirement, which took effect today, could result in employers incurring huge losses.
“Foreign workers, on the other hand, will now be able to remit this RM5 billion elsewhere, including their countries of origin.
“The economy is already losing RM3 billion a year when the government implemented minimum wages for foreign workers.
“Clearly, the country’s economy will face huge a downturn because of this move,” he told the New Sunday Times yesterday.
Shamsuddin was responding to a statement by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi yesterday, in which he said employers would be responsible for paying the levy for their foreign workers.
Zahid, who is also home minister, said employers would not be allowed to deduct the wages of their foreign workers to pay the levy under the newly-introduced Employer Mandatory Commitment (EMC).
Zahid said the government would review the rate of security deposits imposed on employers who brought in foreign workers as the current rate was “too low, and is ineffective as a preventive measure” to ensure the workers returned home at the end of their contracts.
Shamsuddin said the government’s plan to review the rate was difficult to accept.
“How can employers make
sure that their workers do not run away? And can the government ensure that foreign workers do not run away if this measure comes into place?”
Shamsuddin said employers could not track workers who ran away, which was why they depended on the authorities to track down and deport them.
Zahid, in his statement, said the new policy would ensure that employers were more responsible in taking care of their workers.
He said the undertaking would start from the application stage until the worker returned to his
“This policy will help reduce cases of workers fleeing, working illegally in other sectors and overstaying.”
Zahid had said the government would introduce a Letter of Undertaking that underlined the responsibilities and requirements to be fulfilled by employers in the near future.
“Employers should also abide by the Guidelines on the Minimum Standard of Foreign Workers Accommodation if their workers stay in accommodation provided by their employers.”
Zahid had said irresponsible employers were found to have violated the rules and regulations in recruiting foreign workers to Malaysia.
“The government has received reports that employers did not pay wages in accordance with the minimum wage, restricted the movement of foreign workers and confiscated their passports.
“There were instances where foreign workers ran away and the employers washed their hands of the matter and left it to the Immigration Department, police and other agencies to locate and send back the workers.”
Such incidents gave room to irresponsible people to carry out human trafficking, the statement read.