Employers who pass on levy fees to workers risk RM10,000 fine
Employers must pay or face action under Employment Act, says Labour Department
EMPLOYERS who pass the foreign worker levy to their employees can be charged under the Employment Act. Labour Departme ent deputy director Ros sman Abdul said employers guilty of this would be asked to refund the amount deducted from their workers s’ wages.
He said if they failed,d the department would invoke Section 24 (Lawful Deductions) of the Employment Act 1995, which states: “No deductions shall be made by an employer from the wages of an employee otherwise than in accordance with this act.”
“From Jan 1, this (foreign worker levy) will be the responsibility of employers.”
Human Resources Minister Datuk Seri Richard Riot on Wednesday said the condition would be imposed on employers from Jan 1.
It was reported that the move was to discourage the employment of foreign workers, who now number 1.8 million.
The move was initially supposed to come into effect on Jan 1 this year, but was postponed after appeals by employer associations, who said they needed time to prepare.
“They have been given adequate time... to make necessary adjustments to meet the arrangements of this new levy,” Riot said.
Employers will also be required, from Jan 1, to sign an “Aku Janji”, which is an employer’s undertaking document. To date, morem than 5,000 emplooyers have signed it. ItIt covcovers the need for employers to bear the cost of levy imposed on each foreign worker in the country.
The undertaking is also to remind employers that if they fail to comply, they could face legal action aside from being blacklisted from hiring foreign workers.
On Dec 20, the ministry said with the implementation of this policy, employers must not only bear the cost of levy payments for new foreign workers, but also those who renew their Temporary Employment Visit Pass (PLKS).
The levy for foreign workers imposed by the Immigration Department (for the peninsula) for the manufacturing, construction and service sectors, are fixed at RM1,850, while the levy for the agriculture and farming sectors is RM640.
Meanwhile, the Malaysian Employers Federation (MEF) called on the government to review the
new levy mechanism, saying this could lead to additional operating costs for employers, apart from the expected increase in foreign workers’ salaries to 15.6 per cent.
Its executive director, Datuk Shamsuddin Bardan, said the problem would result in less tax revenue for the government.
“The policy will cause employers nationwide to incur additional operating costs between RM3 billion and RM4 billion a year. The drop in profit will mean that companies will end up paying less tax.
“The policy will also lead to the rise in inflation, prices of goods and services, which costs will be passed on to consumers,” Shamsuddin said.
He added that more efforts should be put in place to hire local workers.
“We have about 600,000 unemployed locals. If we encourage them to take up available jobs, we can at least reduce the number of foreign workers,” he said, adding that it would also reduce the number of illegal workers in the country.