The system will be based on the Singapore model where the hiring of foreign workers is subjected to the ratio of local workers employed

By P PREM KUMAR & ALIFAH ZAINUDDIN / Pic By HUSSEIN SHAHARUDDIN

The government has decided to move ahead with plans to implement a multi-tier levy system to reduce the country’s high dependency on foreign workers.

Human Resources (HR) Minister M Kulasegaran said the multi-tier system, which will be based on the Singapore model where the hiring of foreign workers is subjected to the ratio of local workers employed, could be implemented as early as next year.

He said discussions are currently ongoing to determine a fair quantum on the new levy, which will be different in each sector.

However, as a point of reference, he said existing levies will be used as the first-tier charge.

“The sectors and subsectors will be taken into account so that when we implement the levy, they will not be adversely affected. The discussions with stakeholders will continue,” he told reporters after co-chairing a high-level committee meeting on foreign workers management in the Parliament building yesterday.

Home Minister Tan Sri Muhyiddin Yassin, who co-chaired the meeting, said the hike in levies will differ based on industries, with 20% to 30% on average.

“Generally, based on the figures that we have worked out, it may roughly be an increment of 20% from the present levy. It may be higher, depending on the sectors.

“It is not a straightforward formula, but this is subjected to Cabinet approval,” said Muhyiddin.

The multi-tier levy system for foreign workers is based on the principle that the more foreign workers hired, the higher the levy imposed will be.

The policy is seen as a win-win deal where employers are given leeway to engage foreign workers, while the government has control over the numbers employed via the levy charged.

Kulasegaran said the levies will be tax deductible and certain amounts will be used to train local workers to make them more employable across all sectors, especially on automation.

“These are things that we also want to encourage, otherwise it will be a situation where we are always in need of foreign workers,” he said.

On concerns of not being able to hire enough local workers, Kulasegaran said there should be a rethinking of this perception.

“It is not a question of Malaysians not wanting to work. Many factors have resulted in locals not given the privilege to work, so we are trying this system which has been tried and workable in Singapore for many years.

This allow locals to be given the first preference,” he said.

Meanwhile, Muhyiddin said the practice of outsourcing foreign worker recruitment to agencies will be discontinued, following reports of alleged mistreatment and cases of human trafficking.

The matter has been transferred from the Home Ministry to the HR Ministry to be more systematic and in line with current laws.

Muhyiddin said there are over 100 outsourcing companies with more than 26,000 employees under them.

“We are giving them some time, so they can decide to relocate their employees to selected employers. This is will take time and we will let the HR Ministry handle it,” he said.