Malaysia

Foreign worker levy hike in 2011

Malaysia has nearly two million foreign workers. — Reuters picMalaysia has nearly two million foreign workers. — Reuters pic

PUTRAJAYA, May 20 — Malaysia will raise the levy on foreign workers in 2011, after having deferred the implementation last year, Deputy Prime Minister Tan Sri Muhyiddin Yassin announced today.

He said the quantum of increase would vary based on the specific sectors which employ the foreign workers.

“We determine the rate of levy according to the different sectors of the industry. This means that the levy will differ according to the sectors and also in terms of the percentage of the foreign workforce that the industry employs.

“That means if the workforce is higher than the levy will be higher,” Muhyiddin told reporters after attending the Cabinet committee meeting on foreign and illegal workers here.

He added that the government plans to update the system to help the entry of foreign workers.

“We will establish a system for gathering for data and information on foreign workers in which relevant ministries can have access to. Basically, we have to improve upon our system on managing foreign workers — the software, the hardware, data — all of this will be updated and coordinated,” he added.

According to Muhyiddin, the government would also offer amnesty to foreign workers when the integrated biometric identification system is in place.

“We agreed that amnesty will be given after the system is updated in KDN (the Home Ministry), including [a] system to introduce biometric (identification) to ensure that every worker and visitor who comes to Malaysia will be recorded.

“However, it depends on the Home Ministry and Immigration (Department) on when the system can be implemented. Then, the process of amnesty will begin for illegal workers.

“After that, we will take action against employers that harbour workers without permits,” Muhyiddin said.

Malaysia now has approximately 1.9 million foreign workers spread across sectors such as manufacturing (39 per cent), construction (19 per cent), plantation (14 per cent), housemaids (12 per cent), services (10 per cent), with the rest in agriculture.

The contributing countries by rank are: Indonesia (50.9 per cent), Bangladesh (17.4 per cent), Nepal (9.7 per cent), Myanmar (7.8 per cent), India (6.3 per cent), and the rest  from Vietnam.

Last month, Home Minister Datuk Seri Hishammuddin Hussein had announced that the government plans to reduce the number of foreign workers to 1.5 million in three years.

However, Muhyiddin today said that the government had no intention of capping the volume of foreign labour at the moment, as the country’s economy was still recovering.

“Our policy [is] to reduce our dependency on foreign workers and this will be done in stages in the long run.

“It is the question of managing based on the needs, so if there is need in which local labour cannot satisfy and our economy will be affected. So we will allow foreign workers to come in to help the economy,” he said.

He added that the Cabinet has also decided that employers — and not the agents — would now be accountable for their hirelings.

“If they employ foreign workers, then they will be responsible for them. Companies that are involved [in] recruiting foreign workers as an outsourcing company are appointed only to bring in foreign workers,” he added.

Muhyiddin said that government is currently weighing plans to introduce security bonds to ensure employers are more responsible for their employees.

“We will be getting responses from the employers and analyse the situation. This concept has been practised by many countries that recruit foreign works, like Singapore, Middle East but Malaysia does not have any [security] bond, only [a] levy. We are still deciding on this issue,” he said.

MCA president Datuk Seri Dr Chua Soi Lek had recently called for the government to conduct a comprehensive study of the country’s dependence on foreign labour.

Dr Chua noted that the country’s local labour force was not sufficient to maintain local industries despite the government’s ambitious plans for a high-income economy under the New Economic Model.

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