Don’t dismiss suggestion on contribution, urge unions

PETALING JAYA: The suggestion that employers’ contribution to the Employees Provident Fund be raised to 20% should not just be dismissed but discussed with an open mind, says Datuk Mohamed Shafie BP Mammal.

The Union Network International-Malaysia Labour Centre (Uni-MLC) president said he was not surprised that certain employers and small and medium businesses were not prepared to contribute 20% as per his suggestion.

He said that a study could be conducted to determine whether there should be an increase in the employers’ EPF contribution.

“I had expected this kind of response but most importantly we need to air our views and discuss this issue.

“We hope that bosses can have an open mind and we need to conduct a study on this in order to find a win-win solution,” he said when contacted yesterday.

On April 30, Uni-MLC had proposed to the government to increase the EPF contribution by employers from 13% to 20%.

These were among the 12 points proposed by the organisation in conjunction with the Labour Day celebration.

Currently, employees contribute 11% of their monthly salary to the EPF, while employers contribute another 12% or 13% of the person’s salary according to the statutory rate.

The contribution rate for Socso consists of 1.75% from the employer’s contribution, and 0.5% from the employee’s monthly wages.

The rates are provided for under the Employees Provident Fund Act 1991 and Employees’ Social Security Act 1969.

Mohamed Shafie said the existing rate had not been changed for quite some time.

“What we asked actually is for those in the income bracket of RM4,000 and below.

“If they can afford to increase the salary of their board of directors to the tune of millions of ringgit, why can’t these companies help the employees who are earning much less?” he asked.

“Some companies are already paying 19%.”

He said that if employers increased the EPF contribution amount, the workers’ productivity would also increase.

“Please do not deny the rights of the workers,” added Mohamed Shafie.

MTUC secretary-general Kamarul Baharin Mansor said the body agreed with the proposal for employers to contribute 20% to the EPF.

“The discussion on this issue shows that the government is committed to boosting the savings of workers,” he said.

Asked for his view regarding some employers’ response that while they were prepared to contribute such a high amount, it was not the right time, Kamarul replied: “When will be the best time to implement it then?

“This is for the retirement savings and we should do it as soon as possible.

“If it is not done now, it will be too late.”

He also urged all parties, including the employees, unions and the government, to discuss the issue together.

“If we can do it with the minimum wage, why can’t we discuss this issue.

“Employers cannot just simply say no to the proposals. We need to talk about the way forward,” he added.

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