In a statement, MBAM president Oliver Wee said the association disagreed with the idea as it would have “significant cost implications”, especially for the construction sector.

He said if the government went ahead with the proposal, it could lead to an additional cost of “no less than RM110 million per month” for the construction industry, especially since the minimum wage has been increased to RM1,700.

He said employers would also have to contribute 13% to EPF.

“The construction sector, which is already facing rising material costs, labour shortages and intense competition, cannot absorb such a massive increase in operational expenses without affecting business sustainability.”

Wee said Putrajaya should explore alternatives, via dialogues, that can protect the interests of both foreign workers and employers without compromising the financial viability of the construction industry.

The government could enact a law or consider a mechanism and to further engage industry stakeholders, Wee said.

“MBAM asks that the government defer the implementation of this EPF policy for foreign workers until better arrangements can be implemented.”

MBAM is the second association to oppose the proposal.

Earlier today, the Federation of Malaysian Manufacturers (FMM) expressed disappointment over the government’s “unexpected” announcement, saying it was caught off guard as Putrajaya had not engaged stakeholders prior to this announcement.

Like Wee, FMM president Soh Thian Lai said the implementation should be delayed, preferably for another two years, to allow sufficient time for comprehensive stakeholder consultations and for businesses to adjust to the impending financial commitments.

In announcing the 2025 budget last week, Prime Minister Anwar Ibrahim said the government had agreed to make it mandatory for foreign workers to contribute to EPF, adding this would be done in phases.