Jan 9, 2017

MBAM: Rakyat to ultimately bear cost of foreign workers' levy

MBAM: Rakyat to ultimately bear cost of foreign workers' levy

KUALA LUMPUR: The construction industry may be forced to pass down the cost of paying the foreign workers' levy to consumers, if the government does not rescind the policy said the Master Builders Association of Malaysia (MBAM) today.

Its president Foo Chen Lee said the government's decision is set to burden the industry and will be a cost increase.

He pegged the additional cost the industry will have to bear annually at RM2 billion.

"Ultimately, this additional cost (of paying the levy) will be passed down to the consumers. The switch in levy payment to the employer will not bring any benefit to the public.

"Any businessmen will want to have these loses absorbed, so of course we will pass it on," he told a press conference, here, today.

Foo said the RM2 billion consists of, among other things, the cost of levy of about RM2,000 per person for the some 900,000 foreign workers, increase of minimum wages, fuel price and safeguard tax.

Home Minister Datuk Seri Dr Ahmad Zahid Hamidi had, on Dec 31, announced that employers would be responsible to pay the levy of foreign workers, beginning Jan 1, under the Employer Mandatory Commitment (EMC).

Previously, foreign workers are contracted with the condition they pay their own levy for their rights to work here, with employers deducting their wages on a monthly basis.

Foo has urged the government to rescind both the decision to shift the levy payment from the employee to employer and also the implementation of EMC, which is aimed to ensure employers are fully responsible for their foreign workers.

"As you know, construction is the main driver of the economy, so this decision will also directly or indirectly affect about 140 downstream industries, and ultimately the economy," he said.

Foo said while MBAM supported the phasing out of illegal foreign workers and for levy to be paid, it was only right that workers bear their own levy as done previously.

"Otherwise, the foreign workers will be the one benefiting, repatriating this additional windfall to their source country," he said.

On EMC, Foo said it was unacceptable and unfair to shift the burden of responsibility of foreign worker to employers who are hopeless and do not have legal provision to control or detain workers who abscond.

"It will not discourage them from job hopping, but will encourage them instead, as they now no longer owe the employer, compared to previously where they will have to clear their levy debt," he said.

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