PETALING JAYA: Clear details must be provided on the proposed EPF contribution scheme for foreign workers before moving forward with implementation, says the Employment Agencies Association Malaysia (Papa).
Papa President, Datuk Foo Yong Hooi, stressed the need for transparency, particularly in how quickly foreign workers would be able to withdraw their contributions upon returning to their home countries.
“We need to know how fast workers can withdraw their funds once they decide to go home for good, especially in cases of immediate repatriation,” Foo said when contacted.
He highlighted that foreign workers often lack awareness about the EPF scheme, making it crucial for the government to outline clear mechanisms for their understanding and ease of withdrawal.
Foo also raised concerns about the financial burden the EPF scheme would impose on employers, particularly SMEs.
He suggested that contribution rates for foreign workers should be aligned with those for local workers aged 60 and above, where a lower rate of 4% applies and employers are not required to contribute.
“Requiring employers to pay the same EPF contributions as they do for Malaysian workers will severely impact SMEs’ financial standing,” Foo said.
He urged the government to reconsider the timing of the scheme, especially given the upcoming implementation of the multitier levy, which he said would already stretch employers’ resources.
Despite these concerns, Foo believes that remittance practices by foreign workers will not be affected by the EPF contributions, as remittances are an integral part of Malaysia’s economy.
“Without remittances, businesses wouldn’t be able to operate and foreign exchange earnings would suffer,” he said.
