THERE will be a surge in the number of illegal foreign workers in Malaysia when the government enforces the of foreign workers having to pay 80% of the annual RM10,000 levy, the Malaysian Employers Federation (MEF) said today.

The new levy at RM10,000 is also high compared with the previous rate of RM1,850, MEF executive director Shamsudin Bardan said.

“It will invite the illegal workers when being a legal one means having to pay RM8,000 annually as it will be better for them to be an illegal and not pay anything,” Shamsudin said.

“From the perspective of employers, the announcement is seen as good. But I can see many problems arising from the announcement, especially from the International Labour Organisation (ILO) and other groups which deemed it had violated the principle of fairness and equality,” he told The Malaysian Insight.

The government said today it had tweaked the levy policy and skilled foreign workers who have been in the country for more than 10 years will have to pay 80% of the annual RM10,000 levy per worker.

Finance Minister Lim Guan Eng, who made the announcement at the opening of Rehda’s annual property development conference, did not state when this would take effect but said the levy applies to foreign workers in the manufacturing, construction, plantation, services, agriculture, mining and quarry sectors.

The levy, previously fully undertaken by their employers, is applicable when the foreign worker applies to extend the temporary working permit (PLKS), which is extendable for up to three years.

Meanwhile, the executive director of Tenaganita Glorene A. Das asked if the new rule was to suppress foreign workers.

“Is this a new strategy to reduce the country’s reliance in migrant foreign workers?

“We would also like clarity on what category of workers will this policy be imposed as the policy states all foreign workers.

“In the past, regardless of who pays the levy, the migrant workers’ wages are always deducted for levy payment every month by the employers, often double the amount, as this also includes the agent’s fees.

“This is evident in many of the cases we continue to receive. So now the new government has made this deduction legitimate and official.”

Lim said the new policy will increase the government’s revenue within three years.

Details of the policy will be announced by the relevant ministry soon.

Beginning this year, employers are required to pay the levy per worker each year, in line with a cabinet decision on March 25, 2016.

Small and medium enterprises (SMEs) have complained about the big hike in the levy and at being asked to bear the cost.

Lim said with the 20-80 structure, employers would only have to spend RM150 more per worker above the old levy rate of RM1,850.

“This leeway will help reduce the need to recruit inexperienced foreign workers who require long, additional on-the-job training, and also help to reduce your cost.”

The move is also aimed at helping employers retain skilled workers, adding that the construction sector in particular, was short of experienced labourers. – September 24, 2018.