Levy Deductions: Workers Complain Employers Terminate - Government Must Act Against Such Employers

Levy - Malaysian employers who want to foreign migrant workers were required to pay levy to the Malaysian government. Why? The government wanted to encourage employers to employ local Malaysians, but if they wanted to still employ a foreign national, then the employers had to pay a levy to the government for each migrant worker they employ. That payment of levy should also allow these migrant workers access to public amenities, services, etc..

But, what a lot of 'naughty' employers did was that they recovered this 'levy' from the wages of the migrant workers...and the Government of Malaysia (i.e. the Minister of Labour) gave them the official permission  to do this. In law, they could not simply deduct wages of workers in Malaysia, and they needed this permission, and Malaysia's Labour Minister (DG of Labour) allowed certain(most) employers to do this.

The government's permission had a condition, i.e. that the individual  worker agree that his/her wages be deducted so that the employer can recover the levy that he had to pay the government. There were some other conditions too. But, alas the workers were made to believe that this was the law, and they had no choice in the matter. Many workers never agreed to such deductions....and the Labour Minister was just not bothered. Some employers put it in as part of the employment contract, and surely this was very wrong ...End result: Many workers worked without pay for many months as many unscrupulous employers just collected back what they spent on these workers (not just the levy..) from the worker's wages. Great injustice.

Finally, Malaysian government changed policy last year...and did away with these permission that allow employers to recover levy paid by them from worker's wages..

But, some still did so - and when workers complained...they were suddenly terminated. This is what happened to Burmese migrant workers in Nogoya 

Cut-throat employers will be booked, says Labour Dept

PETALING JAYA: Local employers are still fleecing foreign workers of levies from their salaries — despite the Labour Department warning employers about a year ago.

Federal Territory director Khamis A.R. Majid said the department was viewing the matter seriously.

“We witnessed numerous cases where employers were still deducting levies from the foreign workers’ salaries under unlawful terms,” he said.

Last April 1, the Labour Department had issued a circular stating that employers could continue to deduct levies from foreign workers’ wages only until their permit expired for the year.

On renewal of the permit, employers should bear the levy cost for foreign workers with no further deductions made for levy purposes.

The circular also states that employers are not permitted to deduct wages for the levy payment for workers recruited after April 1, 2009.

Until the new decision on Double Levy payment is made, the rates remain unchanged.

The annual levy for foreign workers can range from RM360 (domestic help and agriculture) to RM1,800 (services).

The circular, dated April 20, 2009 and signed by Labour Department director-general Datuk Ismail Abdul Rahim, was issued to business operators as well as foreign embassies in Malaysia.

Khamis said in the latest case, the department had to step in when 26 Myanmar workers from a KL-based Japanese buffet restaurant cried foul upon learning that their salaries were deducted by their employer for levy purposes, among other things.

“In the Myanmar case, the workers also claimed they were laid off without notice, and only given a week’s notice to move out of their hostel. This is a serious case because there have been too many cases of employers taking advantage of foreign workers and tarnishing the country’s good image,” he said.

“Rest assured we will take action against local employers pulling such stunts.”

Malaysian Trades Union Congress (MTUC) senior industrial relations officer, Peter Kandiah, who is helping the Myanmar workers, including getting their passports back from their employers, has called for the Human Resources Ministry to step up efforts against errant employers.

"It's too easy for local employers to dupe foreign workers because too many times, these foreigners don't know how, who or where to turn to for assistance," he said, when met at the FT Labour Department office last Thursday.

"The ministry's system is not effective enough even to protect local workers, much less foreign labourers." - Malay Mail, 15/3/2010, Cut-throat employers will be booked, says Labour Dept

See also earlier post: 26 Burmese Migrants suddenly terminated ....will they get justice?