Phl welcomes foreign workers levy moratorium in Malaysia

The Philippine Embassy in Kuala Lumpur welcomed last Friday the moratorium on increased levies for foreign workers and called for further review of the levy structure.

“The deferral provides a welcome breather for employers and employees at this time of economic difficulties, and allows an opportunity to conduct a thorough review of the levy system,” Ambassador Eduardo Malaya said.

The Malaysian government earlier imposed a restructuring of the foreign workers levy system into two levels, as well as corresponding increases. Employees will have to pay RM2,500 ($ 625) to work in the manufacturing, construction and services sectors, and RM1,500 ($375) in the plantation and agriculture sectors. Malaysia has some 2.1 million registered foreign workers.

This is also an increase from the RM1,250 ($312.50) in the manufacturing, services (island resorts) and construction sectors in Peninsular Malaysia and RM1,010 ($252.50) for the same sectors in Sabah and Sarawak; RM590 ($590) in the plantation sectors and RM410 ($ 102.5) in the agriculture sectors in both Peninsular Malaysia and in Sabah and Sarawak; and RM1,850 ($ 462.50) in Peninsular Malaysia and RM1,490 ($252.50) in Sabah and Sarawak for the services sector.

The levy is paid annually. For household service workers the levy remains the same at RM410 ($102.5).

The proposed move has been met by much opposition from employers’ groups and key sectors, saying that this would greatly impact recruitment of needed workers as well as their profits.

Before workers are given visas to come to Malaysia, payment of the levies imposed on the workers are often advanced by their employers. The workers then have to pay off the levy through salary deductions.

Every time their one year validity working visas are renewed, a levy has to be paid. In effect, these workers get a lower take-home pay due to the levies.

In previous years, the levies were shouldered by the employers.

Most of the affected foreign workers come from Indonesia, Myanmar, Cambodia, Nepal and Bangladesh.

The Philippines has some 10, 000 workers in the affected sectors.

Based on data from the embassy’s Philippine Overseas Labor Office, there has been a decrease in the number of job contracts that are submitted to their office for verification in light of recent developments.

The embassy also reminded Malaysian employers to ensure that proper salaries are given to their Filipino workers, particularly the HSWs.

To ensure that workers get their proper salaries, Labor Attaché Elizabeth Estrada has asked accredited agencies to include affidavits of undertaking that the employers will pay the proper salaries before the POLO will verify the workers’ contracts.