Huazong urges government to revise EPF scheme for foreign workers


PETALING JAYA: The government should consider the concerns of local businesses and design a more suitable short—and medium-term EPF scheme for foreign workers, says the Federation of Chinese Associations Malaysia (Huazong).

Huazong said most foreign workers do not work in Malaysia until retirement, which is why a scheme aligned with the 10-year work permit validity is needed.

Its President, Tan Sri T C Goh, said contribution rates must be reassessed to prevent employers from being overburdened and questioned whether foreign workers would receive the same EPF interest returns as Malaysians.

“If the contribution rates are too high, it would go against the employer's principle of reducing costs.

“If foreign workers’ contributions are fixed at the same rates as locals, it will cause confusion and disputes between foreign and local workers, potentially leading to backlash from employers and citizens,” he said in a statement on Tuesday (Oct 22).

He also raised concerns about the outflow of foreign exchange and pointed out that next year’s minimum wage increase would add further financial pressure on businesses.

He said preliminary calculations suggest that if EPF contributions were applied to Malaysia’s 2.5 million foreign workers, employers would face an additional RM6.6bil annually.

“These calculations are based on next year’s minimum wage increase from RM1,500 to RM1,700.

“The higher the salary, the more the employer will have to contribute. Additionally, the more foreign workers an employer hires, the higher the EPF costs they will face,” he said.

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