Its CEO Abdul Rafik Rajis said the initiative would also relieve employers of the requirement to submit monthly reports. Workers covered by the scheme would also enjoy the benefits of free insurance, he added.
Rafik said the e-wages system was introduced before the Covid-19 pandemic and is presently utilised by 95% of the 5,800 companies that subscribe to CLAB’s services.
He said the system has also been endorsed by the embassies of the workers’ countries of origin as it reduces the likelihood of unpaid wages.
“We want to ensure that workers are not exploited. This system was implemented before Covid-19. However, it was not mandatory back then.
“Many cases of employers neglecting foreign workers (have) caused headaches for the embassies, so after the movement control order (MCO) and the borders reopened, we made it mandatory,” he added.
Rafik said the e-wages system offers some flexibility as employers are allowed to opt out of it.
“They would have to submit monthly wage payment reports,” he added.
Rafik was responding to a call by the National Association of Private Employment Agencies Malaysia (Papsma) for the government to review the e-wwages system, claiming that employers are being “forced” to adopt it, failing which they will be blacklisted.
Papsma president Kris Foo claimed that CLAB violates Section 25 of the Employment Act and overrides the human resources minister’s authority as prescribed under the section.
Section 25 provides that wages may be paid through accounts opened with financial institutions registered under the Financial Services Act, the Islamic Financial Services Act, or the Development Financial Institutions Act.
The section also allows for wages to be paid in cash or by cheque upon written request from the employee, and with the approval of the labour department.
The human resources ministry may also prescribe other methods for the payment of wages under Section 25.
Addressing claims about the blacklisting, Rafik said the action was targeted at companies that choose to pay wages independently but fail to submit the prescribed monthly reports.
“The blacklist is only temporary,” he said adding that it would last from the time a complaint is received from workers until the employer comes forward and explains why they do not use the e-wages system.
“It is not a permanent blacklist. We want their feedback,” he said.
CLAB was set up in 2003 pursuant to a decision by the Cabinet’s committee on foreign recruitment to facilitate bringing in workers for the construction sector.
In 2017, CLAB became a subsidiary of the Construction Industry Development Board (CIDB).