Government’s Proposal to Introduce Employees Provident Fund (EPF) Contribution for Foreign Workers
Finance Minister II Amir Hamzah Azizan recently spoke at the ESG and Sustainability Conference 2024, where he discussed the government’s proposal to introduce Employees Provident Fund (EPF) contribution for foreign workers. According to Amir, the aim of this proposal is to improve wage equity and ensure foreign workers are not disadvantaged.
Closing the Wage Gap
Amir explained that the government’s main objective is to close the wage gap between local and foreign workers, particularly in light of the increase in the minimum wage. He emphasized that by introducing EPF contributions for foreign workers, the government is attempting to equate foreign labor with local labor, thereby discouraging employers from hiring foreign workers.
Phased Implementation
Amir revealed that EPF is currently developing a phased approach to implementing the contributions, which will be revealed by next year. He emphasized that the government does not want to disrupt the current employment landscape, hence the need for a gradual implementation.
Industry Reactions
However, the proposal has received criticism from industry leaders, who are concerned that it may drive up labor costs and affect the country’s competitiveness. The Federation of Malaysian Manufacturers (FMM) has urged the government to delay the implementation by two years to allow for sufficient stakeholder consultations and for businesses to adjust to the impending financial commitments.
Conclusion
The government’s proposal to introduce EPF contributions for foreign workers aims to promote wage equity and ensure that foreign workers are not disadvantaged. While the proposal may have its drawbacks, such as increased labor costs and potential disruptions, the government is committed to implementing a phased approach to minimize the impact. As the debate surrounding this proposal continues, it remains to be seen how the government will balance the interests of all stakeholders.
FAQs
- What is the purpose of the government’s proposal to introduce EPF contributions for foreign workers?
The proposal aims to improve wage equity and ensure foreign workers are not disadvantaged. - Why is the government introducing EPF contributions for foreign workers?
The government is trying to close the wage gap between local and foreign workers, in light of the increase in the minimum wage. - When will the EPF contributions be implemented?
The government plans to implement the contributions by next year, with a phased approach to minimize disruption. - What is the reaction of industry leaders to the proposal?
Industry leaders, such as the Federation of Malaysian Manufacturers (FMM), have expressed concerns that the proposal may drive up labor costs and affect the country’s competitiveness.