Employers must adhere to foreign workers levy or face action from Jan 1


The manufacturing, construction and services sectors operating in Peninsular Malaysia have to pay as high as RM1,850 for each foreign worker.

But, employers in the manufacturing and construction sectors in Sabah and Sarawak will pay a lower fee of RM1,010 compared to their counterparts in the peninsula, while fees for foreign labour for the services sector had been set at RM1,490.

The levy rate for foreign workers in the farming and agriculture segments have been fixed at RM640 for Peninsular Malaysia, while the rate in Sabah and Sarawak is at RM590 and RM410 respectively.

Meanwhile, the fee for maids ranges from RM410 to RM590 nationwide.

The new rate, which will take effect on Jan 1, 2018, is applicable for new foreign workers and foreign workers who have renewed their temporary work visit pass.

It also applies to employers who have paid the foreign worker levy in advance before the date of enforcement.

Under the revised policy, the levies will be borne by the employers and not the workers.

The announcement is in line with the government’s plan to limit the employment of foreign workers in the country at 15% of total employment by 2020.

As at July 31, 2017, the number of legal foreign workers has declined to 1.75 million from 2.13 million in 2015.

The new levy structure was supposed to be implemented early this year.

However, objections from various groups deferred the implementation.

Employers from various sectors complained that the abrupt change in the policy and hike in levy rate would add to the overall costs of doing business in Malaysia.

The Malaysian Employers Federation (MEF) had previously argued that the introduction of the levy system would exacerbate losses by RM5 billion due to additional operation charges.

MEF MD Datuk Shamsuddin Bardan said a two-way discussion with the industry should have been held before any decision is made.

He said there were other pressing issues that could have been made a priority to reduce the foreign workers count, such as reviewing the full impact of the proposed extension on the minimum standard of housing for foreign workers as well as security deposits.

The government has since opted to raise the levy in stages to further reduce the hiring of foreign workers.

In a statement issued yesterday, the Human Resource Ministry said action will be strictly enforced on employers who fail to comply with laws, regulat ions and policies which have been set in respect of levy payments for foreign workers.