‘Employers should pay RM10,000 levy’

PUTRAJAYA: Finance Minister Lim Guan Eng, responding to criticism of plans to get employers and foreign workers to share a RM10,000 levy for employment beyond 10 years, yesterday backtracked and said it would be fully borne by the employers beginning Oct 1.

On Monday, he had announced that employers would bear 20% of the RM10,000 levy for each worker, while the employee would pay the rest.

Lim said the government decided to re-think the changes after a local Chinese daily reported that the move would burden foreign workers.

“Alternatively, the employers can send their workers back to their home countries after 10 years, then apply to come back as a ‘new’ worker and pay RM1,850.”

The report quoted SME Association of Malaysia president Datuk Michael Kang as saying that the “levy sharing” move was “not logical” given that some workers were earning the minimum wage of RM1,000 despite having worked here for ten years.

He also expressed concern over the outflow of foreign labour due to the higher levy rate.

Lim stressed that the levy remains at RM1,850 for the first ten years and will only increase to RM10,000 beyond that.

He said flexibility was given in the hiring of foreign workers, with an extension of three years after the 10-year permit expires, to ensure enough skilled workers for businesses. – by Lee Weng Khuen