‘Employers may pass on worker levy’

> Builders association says move will be inevitable if govt does not rescind policy

KUALA LUMPUR: The construction industry may be forced to pass the cost of paying foreign worker levy to consumers if the government does not rescind the policy that shifts responsibility for the levy from workers to employers, said the Master Builders Association of Malaysia (MBAM) yesterday.

Its president Foo Chen Lee said the government’s decision will burden the industry.

He estimated the additional cost the industry will have to bear annually at RM2 billion.

“Ultimately, this additional cost (of paying the levy) will be passed down to the consumers.

“The switch in levy payment to the employer will not bring any benefit to the public,” he told a press conference here yesterday.

“Any businessman will want to have these losses absorbed, so of course we will pass it on.”

Foo said the RM2 billion consists of, among other things, the cost of levy of about RM2,000 per person for some 900,000 foreign workers, increase of minimum wages, fuel price and safeguard tax.

Home Minister Datuk Seri Ahmad Zahid Hamidi had, on Dec 31, announced that employers would be responsible for paying the levy on foreign workers, beginning Jan 1, under the Employer Mandatory Commitment (EMC).

Previously, foreign workers were contracted with the condition they paid their own levy for their rights to work here, with employers deducting their wages on a monthly basis.

Foo has urged the government to rescind the implementation of EMC.

“As you know, construction is the main driver of the economy, so this decision will also directly or indirectly affect about 140 downstream industries, and ultimately the economy.”

Foo said while MBAM supported the phasing out of illegal foreign workers and for levy to be paid, it was only right that workers bear their own levy as done previously.

“Otherwise, the foreign workers will be the ones benefiting, repatriating this additional windfall to their home country,” he said.

On EMC, Foo said it was unacceptable and unfair to shift the burden of responsibility of foreign workers to employers who do not have legal provisions to control or detain workers who abscond.

“It will not discourage them from job-hopping but will encourage them instead.

“They now no longer owe the employer unlike previously, where they have to clear their levy debt,” he said.