KUALA LUMPUR: Mandatory Employee Provident Fund (EPF) contributions for foreign workers is expected to come into effect in the fourth quarter of 2025, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
This comes after the Employees Provident Fund (Amendment) Bill 2025, which mandates foreign workers and their employers to contribute 2% of monthly wages to the retirement fund, was passed in the Dewan Rakyat on Thursday (March 6).
He said foreign workers would be able to withdraw their EPF contributions when they return to their home countries and not only when they turn 55.
"(This is) As long as their work permits have expired and there is proof that their permanent employment has come to an end," he said during his winding-up speech on the debates on the Bill in the Dewan Rakyat on Thursday.
Amir Hamzah said the EPF is in the midst of devising a registration mechanism for foreign workers through the integration of databases with federal agencies, such as the Immigration Department.
This he said would enable automatic registration of workers and for banks to verify information in relation to the accounts held by non-citizens.
The EPF will also expand its online registration channels via i-Akaun (Employer) and the self-service terminals.
He said mandating foreign workers contributions would also bridge the disparity between Malaysians and foreign workers and ensure that all workers are covered under a social protection scheme.
Amir Hamzah said as at December 2024, only 22,635 or 0.9% of the 2.5 million foreign workers have opted to actively contribute to the EPF.
He said foreign workers who are already contributing to EPF could request to maintain their contribution at the current rate.
He said the contribution rate has been set at 2% for employers and employees until there are further changes.
This, he said, is to ensure cost increases to employers are under control and are structured, in order to reduce the risk of economic shock.
The Bill was tabled for the first reading on March 4.
