Press Digest - Ministry's requirement for employers to pay foreign worker's levy shocks FMM

PETALING JAYA: Federation of Malaysian Manufacturers (FMM) says it will seek a dialogue with the Home Ministry over the latter's surprise decision to implement the Employer Mandatory Commitment (EMC), which requires that employers pay their foreign workers' levy.

It president, Tan Sri Lim Wee Chai, said the levy, which totals more than RM4 billion a year, will definitely burden employers and increase their operating costs with the implementation of the EMC on Jan 1, Nanyang Siang Pau reported today.

The government announced a steep hike in foreign worker levy at the beginning of last year but reduced the quantum of increase following a hue and cry.

Last week, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi, who is also home minister, said effective this year, employers would have to pay for the levy on their foreign workers under the EMC, a new ruling aimed at ensuring employers are fully responsible for their foreign workers.

Lim said that as it is, there are still many unresolved issues related to foreign labour, including the delays faced by employers in getting approvals to hire foreign workers.

"The levy on foreign workers, which totals more than RM4 billion a year will be an additional burden and financial pressure on employers, who are already affected by the slide in the ringgit," he said, adding that this amount of money, which will be saved by foreign workers not having to pay for the levy themselves, will be repatriated by these workers.

He said FMM was shocked over the sudden implementation of the EMC.

"There was no dialogue or discussion on the EMC or when it would be implemented.

"As such, FMM is seeking a dialogue with the Home Ministry to discuss the problems faced by manufacturers (due to the EMC)."

He also said FMM is of the view that there should be consultation on any changes to government policies that will result in an immediate cost impact to manufacturers.