‘Cuts to foreign workers’ pay too high’

Labour law experts say deduction between 10% and 12% more realistic

KUALA LUMPUR: The proposal for employers to deduct 20% of their foreign workers’ basic salaries for Socso to prevent them from absconding is too high, according to a labour law practitioner.

Several firms and restaurant proprietors also said the figure proposed by Human Resources Minister M. Kulasegaran was “too steep”.

Lawyer Datuk Thavalingam Thavarajah suggested the government starts off at a rate between 10% and 12%.

Welcoming the move, he described the “forced savings” pro- posal as not oppressive to foreign workers but “protective”.

“It takes into account the welfare of the workers who would be receiving the deducted wages back from Socso once their employment permit expires.

“Also, if the money is kept in Socso it will be good as the government can protect it from unscrupulous employers,” he added.

Thavalingam said that rightfully, the money should be kept in an interest-bearing account.

“There will also be a need for some form of review on the law as this is a significant development to the structure,” added Thavalingam, who is the author of four books on labour law.

Hap Seng Consolidated Bhd group human resource director Simon Sim Thai Fong said the deduction should be capped at a maximum 10%.

“Cutting 20% is a lot of money. Workers are earning about RM1,500, and cutting too much from their wages will discourage them from coming to Malaysia.

“The government needs to sell the proposal to the stakeholders and convince foreign workers that it would benefit them and protect their employers,” he said.

Sim said the deducted salaries should be kept in an interest-bearing account so that the account holder would be paid some amount of interest by Socso at the end.

“Socso will have to be very careful with how they manage the foreign workers’ fund,” he added.

Popular chain Original Penang Kayu Nasi Kandar managing director Burhan Mohamed said foreign workers might not be happy with the proposal as the cut was too high.

“I will adhere to the law, but the 20% sum is a big lump sum for them. If their salary is RM1,000 and you cut 20%, which is RM200 or more than 3,000 rupees, it will be difficult for them to manage.

“Their families back home can live for an entire month on that amount,” he added.

Even with the mechanism in place, Burhan said some workers would still run from their jobs and not bother about the money being held by Socso if they were truly unhappy.

“And if they are unhappy, there is no point in keeping them,” he said.

On Saturday, Kulasegaran had said that the issue of runaway employees was among the major problems faced by employers, and the proposal was aimed at nipping it in the bud.

He said the move was also to prevent employers from incurring losses on investments in bringing the workers in.

Kulasegaran said the sum deducted from foreign workers would be kept in Socso and they would receive the money when they leave upon the expiry of their work permits.