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Malaysian govt to impose hiring costs on foreign workers

PTI | | Updated on: Jan 31, 2013

In a move which will affect thousands of Indians working here, the Malaysian Government has decided that the cost of hiring a foreign worker, will now be borne by the employees themselves instead of their employers.

The decision will be enforced with immediate effect on new foreign workers and those wishing to renew their work pass, employment pass, or temporary work visit pass.

Malaysia heavily relies on foreign labour to help out in various sectors.

Recently it implemented a minimum wage scheme which also covers foreign workers.

The move is aimed at reducing the hiring cost for employers, said Finance Minister Ahmad Husni Hanadzlah.

“The minimum wage, which came into force this year, has raised the salary for all workers on an average of between 30 per cent and 50 per cent, or from (Malaysian ringgit) RM 600 — RM 700 to RM 900 (about 12,000 Indian rupees) a month,” he said.

“With its implementation, all workers, including foreigners, will get other benefits such as a higher amount of overtime pay, taking the overall income average to between RM 1,200 and RM 1,500 a month,” Hanadzlah said.

“The move to impose the levy on foreign workers will not be a burden to them as the levy paid is between RM 34.16 and RM 154.16 per month, compared with a general increase in salary of between RM 300 and RM 500 per month,” the minister said in a statement yesterday.

The collection of levy for foreign workers was introduced in 1992 and was fully borne by the workers until 2009 when the Government decided to shift the burden to the employers.

The 2009 decision was to control a ballooning population of foreign workers in the country at the time.

Employers have welcomed the move, saying the burden of paying levy should rest with the employees.

The Malaysian Trades Union Congress, however, felt that the decision is a form of continued discrimination against foreign workers as the move serves only to reduce the burden of the employers.

Chua Soi Lek, chief of the Malaysian Chinese Association, a component of the ruling party, felt the foreigners should also bear transportation and housing costs under the minimum wage policy, and that the party would continue to pursue this.

“Shifting the levy to the foreign workers alone is not enough,” he said.

Malaysia has a 2.4 million-strong Indian-origin population.

Published on January 31, 2013
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