Its deputy chairman, Chris Lee Ching Yong, said Home Minister Ahmad Zahid Hamidi should re-examine the newly-introduced Employer Mandatory Commitment (EMC), which bars employers from deducting the levy from their foreign workers’ wages.
Apart from businessmen incurring higher costs, he said the EMC would lead to RM4-RM5 billion in foreign remittance losses every year.
“We ask Zahid to seriously reconsider jeopardising the income of Malaysian businesses and wage earners, and the overall population,” Lee said in a statement today.
“The implementation of this system may also encourage foreign workers to run away from their employers and not the opposite,” Lee said.
He said if the levy was no longer deducted from wages, foreign workers would be getting more from their salaries.
It has been reported that the prevailing levy for foreign workers in the manufacturing sector is around RM154 per month, or around RM1,850 per annum. This means employers will face a 15.4% hike over the minimum wage of RM1,000 per month.
Lee said if foreign workers were getting 15% more, locals might also ask for a salary increase and this would have a “knock-out effect on the business sector”.
He also said with Malaysia having three million legal foreign workers, the foreign levy of RM1,500 per worker was equivalent to an annual remittance of RM4-RM5 billion, which would be bad for the already weakened ringgit.
“The low foreign exchange rate of the ringgit has brought cost increases to businesses and manufacturers. The EMC will only further increase their costs, which will eventually lead to consumers facing price hikes for goods and supplies.
“Such a situation will easily aggravate inflation, which will be bad for the country’s development.
“In this current gloomy economic situation, the government should give the private sector greater support and encouragement. Any unfavourable business policies are not suitable at this time,” Lee said.
On Dec 31, Zahid announced employers would have to pay the foreign levy for the workers and they cannot deduct it from their wages under the EMC policy that came into effect on Jan 1.