FMM wants more details on foreign workers salaries deduction

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) is calling for more details to further understand the proposal to deduct foreign workers salaries to have a form of savings and to concurrently address foreign workers runaway issue faced by employers.

Its president, Datuk Soh Thian Lai said while there could be some positive outcomes such as savings for workers, protection against runaway workers, reduction in short-term foreign exchange repatriation, some aspects should be considered.

“We need to see if the foreign workers may consider the proposed deduction of 20 percent to be too high, as many would have financial commitments in their home countries, including debt repayment,” he said in a statement yesterday.

He said the Employment Act should be amended to allow employers to make the deductions as statutory contributions by the foreign workers.

“At the same time, the Socso Act may also need to be reviewed to undertake the role of managing the Fund. The proposed savings appear to be more in line with the EPF (Employees Provident Fund) model than Socso (Social Security Organisation Malaysia),” he said.

Thian Lai added that the government also needs to consider the mechanism and criteria for foreign workers to withdraw their contributions as well as whether there is interest earned like savings in a bank.

“The need to look into the legality and human rights aspect to enforce savings and confiscate the earnings of a runaway worker,” he added.

He said FMM is looking forward to be involved in the technical committee meetings which should be convened to further discuss this proposal before submitting to the Cabinet for consideration.

Human Resources Minister M. Kula Segaran recently announced that The National Labour Advisory Council (NLAC) has formed a technical committee to study a proposal on deducting 20 per cent of foreign workers’ basic salaries and setting aside the money in a savings scheme. - Bernama