KUALA LUMPUR: The government has been advised to engage stakeholders and set a clear policy in the implementation of the mandatory contribution for foreign labourers to the Employees Provident Fund (EPF).
Federation of Malaysian Manufacturers and Malaysian Employers Federation (MEF) said before the policy was announced in the 2025 Budget by Prime Minister Datuk Seri Anwar Ibrahim, both associations had not been informed or been engaged in the policy discussion which caused some surprise to the employers and companies.
Malaysian Employers Federation executive director (MEF) Datuk Shamsuddin Bardan questioned why the policy implementation was not conducted transparently, as the companies are going to be impacted by the minimum wage increase and multi-tier levy system set to be implemented this year on top of the mandatory contribution for the foreign workers.
He said all these policies would increase the operational costs among the companies as with the introduction of the new minimum wage of RM1,700 starting Feb 1, the employers would have to spend up to RM13.3 billion per year on the EPF contribution.
"The question is can the employers really sustain their businesses with these increases? With the new minimum wage, there will be an increase of 13.3 per cent (for the employers)...tell me whether the employers can sustain.
"To make it worse, (there were) no discussion with all the stakeholders at all prior to the announcement of the 2025 Budget. Everyone was taken by surprise, no discussion with the union, it's just a top confidential matter done in secrecy, where is transparency?
He added that MEF hopes the government will review the policy, as it may hinder employers and prevent the goals of the Madani economic framework from being achieved.
Shamsuddin said this during the Roundtable Discussion: Expanding EPF Coverage to Migrant Workers in Malaysia.
During the tabling of the 2025 Budget in October, Prime Minister Datuk Seri Anwar Ibrahim announced that the government planned to make it compulsory for all non-citizen workers to contribute to the EPF.
Anwar, who is also Finance Minister said the move is in line with the government's commitment to providing fair treatment to all workers regardless of their nationality as per international standards.
As a response, MEF president Datuk Dr Syed Hussain Syed Husman said employers should not be required to pay the same EPF contributions for foreign workers as they do for local employees as the cost of such a policy would be too high for companies especially small and medium enterprises (SMEs).
FMM president Tan Sri Soh Thian Lai also echoed a similar sentiment as a response which he urged the government to delay the initiative
Meanwhile, the National Human Rights Commission (Suhakam) also asked the government to engage with the stakeholders involved in the initiative to understand their perspective as the 'buy-in' from the businesses is important to prevent losses to the companies involved with the government policy.
Its commissioner Ragunath Kesavan called for a uniform policy on the matter in order to help the companies move forward as they have to deal with various issues involving foreign workers from high cost and term limits set on the workers.
"Every year, there is a change in policy; that can't happen. If there is no uniformity, it will be hard to move forward.
"You need to look at it from the employment perspective," Ragunath said.
Negri Sembilan Federation of Malaysian Manufacturers chairman Datuk Steven Aroki, also called for a clear policy direction by the government in implementing the EPF mandatory contribution for foreign labourers.
He said the government should set a clear direction and proper timeline for its policy ahead of the implementation - for example five years before the eventual implementation instead of announcing the policy whenever the government wants.
"In the United Kingdom, the (foreign workers) policy is clear, the foreign workers can simply go to the authority if there is any problem. Meanwhile, in Singapore, you can hire as many as you want but you have to meet the criteria and the more you hire the more expensive it becomes.
"What employers want is a clear policy. Look at Thailand, the government changes every now and then but the policy in general stays…but in Malaysia, the policy usually gets announced as when they like…so there is no clarity," Aroki said as the companies don't have issues in adhering to the government policies as long as there is a clarity in the policy itself.
Source: https://www.nst.com.my/news/nation/2025/01/1160955/consultations-stakeholders-needed-epf-foreign-workers