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Stop levy deductions, employers told

KUALA LUMPUR, 1 April 2009: The government has ordered all employers to stop deducting the cost of levy from the monthly wages of their foreign workers from this month.

This was conveyed to the employers through individual letters by the Manpower Department last week, according to the executive director of the Malaysian Federation of Employers, Shamsuddin Bardan.

Shamsuddin told Bernama today that employers were very “upset” with this turn of events, as they had earlier been given permission by the department to deduct the cost of the levy on a monthly instalment basis.

He explained that when the foreign workers were brought in here, the employers had paid the levy on behalf of the employees and it was in the contract that this be deducted from the wages. The levy was RM1,800 per employee.

However, in the mini budget announced by the government on 10 March, the levy for employees in the manufacturing and services sectors had been increased to RM3,600 effective from today and that the levy is to be paid by employers.

Shamsuddin said it was unreasonable for the government to change its policy in mid-stream as it would upset the cash flow and business planning of the employers, especially those with hundreds of foreign workers.

“We can accept if this ruling applies to new workers, but not to the existing workers,” he added.

The Federation of Malaysian Manufacturers (FMM) had also echoed similar sentiments.

Meanwhile, a Manpower Department spokesperson said the department did not decide on the policy but was “just implementing the policy decision”. — Bernama


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