EMPLOYERS are concerned about the proposed extension of Employees Provident Fund (EPF) coverage to non-Malaysian workers, including expatriates.
This was raised by Malaysian Trades Union Congress (MTUC) president Mohd Effendy Abdul Ghani during a roundtable discussion on expanding EPF coverage to migrant workers in Malaysia today.
While the policy aims to enhance social protection, he said employers fear its financial implications, estimating that annual costs could reach RM13.3 billion once fully implemented.
“This is not just about foreign workers. It includes expatriates and future non-citizen employees as well. Employers are asking if they can sustain their businesses with these kinds of cost increases,” he said.
He added that small and medium enterprises (SMEs), which account for 98% of employers in Malaysia, are particularly vulnerable, with many already struggling under tight profit margins.
Mohd Effendy also criticised the lack of prior engagement with stakeholders on the EPF changes.
“There was no discussion at all with employers before this announcement. Everyone was caught by surprise,” he added.
He also noted that this was not the first time such decisions were made without proper consultation.
Beyond EPF contributions, Mohd Effendy highlighted additional burdens, such as increased levies under the multi-year levy system announced in the 2025 Budget.
“The government has yet to demonstrate the courage to reduce levies. Instead, we see costs going up by at least 20%, adding further strain on businesses,” he said.
High recruitment costs for foreign workers were also a key issue, with employers paying up to RM25,000 per worker due to reliance on agents.
“Employing foreign workers is not cheap. Employers face exorbitant fees, and there is no guarantee the workers will stay beyond six months. This system is unsustainable,” he said.
Additionally, Mohd Effendy urged the government to revisit its policies and streamline processes to support businesses while maintaining fairness for workers.
Source: https://themalaysianreserve.com/2025/01/14/employers-voice-concerns-over-epf-coverage-extension-and-rising-biz-costs/