FMM wants more details on 20% deduction of foreign workers’ salaries

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) wants more details to better understand the proposal to deduct 20% of foreign workers’ salaries as a form of savings and to address runaway workers faced by employers.

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

“We need to consider whether the foreign workers will find the proposed 20% deduction too high as many would have financial commitments in their home countries, including debt repayment,” he said in a statement.

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

“At the same time, the Social Security Organisation Malaysia 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 Employees Provident Fund model than Socso,” he said.

Soh added that the government must consider the mechanism and criteria for foreign workers to withdraw their contributions as well as whether there would be interest earned like savings in a bank.

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

Soh added that FMM was looking forward to be involved in the technical committee meetings to further discuss the proposal before submitting it to the Cabinet for consideration.

Human Resources Minister M. Kulasegaran recently announced that the National Labour Advisory Council formed a technical committee to study the proposal on deducting 20% of foreign workers’ basic salaries and setting aside the money in a savings scheme. — Bernama