By LYDIA NATHAN / Pic By TMR File

Manufacturers have warned that “someone” will have to pick up the tap for the additional cost after the authority mandated that employers pay for their foreign workers levy.

Malaysia employs about 1.75 million legal foreign workers.

Besides domestic helpers, the majority of these workers is employed in the plantation, manufacturing and construction sectors.

“Now that employers need to pay for the foreign workers to work legally here in Malaysia, someone will have to bear the cost,” said SME Association of Malaysia president Datuk Michael Kang.

“Previously the workers paid the cost themselves which included health insurance and all. Now, it will be an extra burden to employers,” he told The Malaysian Reserve.

He said any policy to be implemented should take into consideration the cost of living and the inflation rate.

The government announced that employers will now need to bear the cost of any foreign worker they employ.

The new rate, which will take place on Jan 1, 2018, had been previously postponed for a year as the government tried to work out certain standards and regulations.

It is also already stipulated in the employers undertaking document, which must be signed by employers before they are allowed to hire foreign workers, and this applies to employers who have paid the foreign worker levy in advance before the date of enforcement.

“We are not happy with this regulation,” Kang said, adding that the related industries have asked for a meeting with the Ministry of Home Affairs over the matter.

Kang said the illegal workers issue in the country has not been solved and this regulation could worsen the situation.

He said previously these workers paid for the levy and visas and it prevented them from leaving the country or their work at whim.

“If workers pay themselves, it is least likely that they will run away. Employers now may opt for illegal workers to avoid paying the levy or simply because it is easier.”

The levy rates would cost the current and future employers more than RM1,500 per worker, subsequently impacting the manufacturing, construction and services sectors as well as farming and agriculture.

The government is trying to force manufacturers and various industries to be less dependent on foreign workers by implementing automation and faster construction methods.