KUALA LUMPUR: Construction industry players want the Employer Mandatory Commitment (EMC) to be rescinded as it does not benefit the country.
They said to shift the foreign workers’ levy payment to employers under the EMC would not benefit the country as money would flow out of Malaysia, while its sudden implementation would impact the economy.
Master Builders Association Malaysia (MBAM) president Foo Chek Lee said the foreign workers would repatriate the “windfall” to their source countries as employers would no longer be allowed to deduct their salaries for the levy payment.
The amount can be utilised by local industries to adopt new technologies and mechanisation to improve and increase productivity, he stressed.
“With modernisation, we can reduce the dependency on foreign workers and we will slowly phase them out.
“The policy change without consulting us can cause a financial loss in the tune of RM2bil per year as far as contractors are concerned.
“This will impact us greatly, especially when the levy was just increased from RM1,200 to RM1,850 less than a year ago besides the increase in minimum wage.
“The implementation of the EMC caught us by surprise. We appeal to the Government to rescind this directive,” he told a joint press conference with 33 other industry players here yesterday.
Beginning Jan 1, employers are fully accountable for the foreign workers they hire and can no longer deduct their foreign workers’ levies from their salaries.
Foo said that there was also a rise in the prices of fuel and construction materials, machinery, imposition of additional safeguard tax on steel bars and other costs, compounded by the depreciation of the ringgit.
“Ultimately, the costs will have to be passed down to the people.”
Foo also said the foreign workers serving pre-existing contracts would also demand for the same terms.
“This will cause dissatisfaction among the local workers,” he said.
Instead of discouraging job-hopping, he said the EMC would encourage foreign workers to abscond and go to other places with better pay as there was nothing for the employers to hold them back.
MBAM vice-president Tan Sri Sufri Mohd Zain said industry players were more rigid about employing people and this would mean that work would be extended.
“If the Government does not delay the decision (on EMC), the current account of the country will deficit further.”
The construction industry needs some 1.2 million foreign workers. The estimated number of foreign workers in the industry now is around 900,000.