Thursday, January 31, 2013

All workers entitled to Minimum Wages, that is Basic Wages - if employers can deduct levy, allowances, etc - Workers lose

It is a grave injustice when migrant workers are made to pay back to their employers the levy that they had to pay the government to employ a foreign worker - and not a local worker. Remember, the rationale for the levy imposition was to discourage employers hiring foreign workers...Previously, employers were deducting wages of workers to recover their expenses in bringing in migrant workers - then as of 1/4/2009, the Malaysian government put a stop to this practice especially with regards to levy. Now, we are back to a state of injustice.

They work under the same working conditions - BUT now they will not be getting the same for their work for they may get the same minimum wage BUT then there will be further deductions from their wages, when there are no such deductions for local workers.Remember, this not the first of this additional deductions - the Malaysian government already shifted the obligation for most migrant workers from their employers when they forced the migrant worker to pay that foreign workers’ hospitalisation and surgical insurance scheme in 2011. After all, is it not always the obligation of employers to pay for the hospitalisation and surgery more so when it happens at the workplace, or is related to employment.

If the Malaysian government is concerned about employers financial obligations in paying minimum wages, then just do away with the LEVY or reduce the LEVY... or reduce the other fees that employers have to pay in running their business. Do not make workers bear the burden

See also:-Foreign workers will now have to pay levy as in 1992 - a great injustice for workers

January 30, 2013 21:14 PM

Foreign Workers To Bear Levy Payment With Immediate Effect

KUALA LUMPUR, Jan 30 (Bernama) -- The Cabinet today decided that payment of foreign worker levy should be fully borne by the worker, and not the employer, with immediate effect.

In a statement, the finance ministry said the 1992 levy policy would be re-imposed on new foreign workers or when they renewed their work, study or visit permits.

"The move by the government in imposing the levy on foreign workers will not burden them as the levy rate is between RM34.16 and RM54.16, as compared to the hike in their wages of between RM300 to RM500 a month," it said.

According to the statement, since April 2009, the government had decided that the payment of foreign worker levy was fully borne by the employer to keep a check on the employment of too many foreign workers.

Nonetheless, since the RM900 minimum monthly wage policy in Peninsular Malaysia and RM800 in Sabah and Sarawak became effective on Jan 1, it has been getting brickbats from several parties.

Among them were the Malaysian Employers Federation and the Malaysian Trades Union Congress which claimed that foreign workers were now receiving better wages under the minimum wage policy, and should therefore, pay the levy themselves.

The collection of levy was introduced in 1992, to off-set the huge expenditure undertaken by the government for public amenities such as clinics, roads and other services enjoyed by both foreign workers and local residents.

-- BERNAMA, 30/1/2013,  Foreign Workers To Bear Levy Payment With Immediate Effect

Cabinet: Foreign workers to pay levy instead of employers with immediate effect
PUTRAJAYA: The Cabinet decided on Wednesday that foreign workers should pay the levy instead of employers.

The decision is to be enforced with immediate effect on new foreign workers and those who wish to renew their work pass, employment pass or temporary work visit pass.

The move is to alleviate the hiring cost for employers, said Finance Minister II Datuk Seri Ahmad Husni Hanadzlah.

“The minimum wage, which came into force this year has raised the salary for all workers on an average of between 30% and 50%, or from RM600- RM700 per month to RM900 monthly.

“The Government's move to impose a levy on foreign workers will not be a burden to them as the levy paid is between RM34.16 and RM154.16 per month as compared to a salary increase of between RM300 to RM500 per month,” Ahmad Husni said in a statement Wednesday.

The collection of levy for foreign workers was introduced in 1992 and was fully borne by the workers until 2009 when the Government decided to shift the levy burden to employers.

The 2009 decision was aimed at controlling the increase in the number of foreign workers in the country at that time.- Star, 30/1/2013, Cabinet: Foreign workers to pay levy instead of employers with immediate effect

Published: Thursday January 10, 2013 MYT 6:28:00 PM

MTUC: Don't give in to employers' demand on foreign workers levy

PETALING JAYA: The MTUC has called on the government not to bow to the demands of employers to revert the policy of levy payment for foreign workers.

Since 2009, employers had been paying the levy for their foreign workers, but now the Malaysian Employers Federation (MEF) wants to shift this burden of levy payment back to the workers.

The MEF's rationale was that the workers would be earning more, with the implementation of minimum wage policy and hence, could afford to pay the levy.

The minimum wage policy of RM900 monthly for Peninsular and RM800 for Sabah and Sarawak, came to effect on Jan 1.

MTUC president Khalid Atan begged to differ, saying that the employers should not confuse minimum wage with increased wage.

He told Bernama that if workers were asked to pay the levy, the minimum wages policy would not benefit them at all, as whatever little increase in salary they enjoyed, would be wiped out with the levy payment.

According to MEF executive director Shamsuddin Bardan, the employers forked out an annual RM2.5bil in levy payment.

He estimated that the minimum wages policy implemented effective this month, would cost employers another RM8.5bil per year.

He pointed out that with such huge payout, it would be appreciated if the government could ease the burden of employers and asked the workers to pay their own levy.

Khalid, however, felt that employers could afford to absorb the levy with their increased income due to the economic boom.

On the provision of free accommodation, transportation, medical, electricity and water to foreign workers, he said this was part and parcel of the terms and conditions of employing foreigners.

As a result, employers should abide by it, and should not deduct the cost of these perks from the employee's salary, he said. - Star, 10/1/2013, MTUC: Don't give in to employers' demand on foreign workers levy

Thursday April 16, 2009 MYT 4:09:00 PM

Employers can deduct levy from wages, again

KUALA LUMPUR: Employers are now allowed, again, to deduct the cost of the levy from the wages of the their foreign workers until the expiry of their present visas, Labour Director-General Datuk Ismail Abdul Rahim said Thursday.

Employers had been stopped from making that deduction from April 1. Making them bear the cost made them unhappy as it upset their budget.

The directive was, therefore, reversed by the Human Resources Minister Datuk S. Subramaniam Thursday following numerous appeals by employers, Ismail told Bernama.

However, Ismail explained that no deduction would be allowed for new employees registered after April 1 in line with the government's policy requiring employers from all sectors to bear the full cost of the levy from that cutoff date.

The rationale behind getting employers to bear the levy was to discourage them from employing foreigners, he said.

Nevertheless, Ismail hoped the new decision would lessen the burden of employers during this economic downturn.

Meanwhile, the Immigration Department has yet to implement the new levy rates for foreign workers in the manufacturing and services sectors because it had not been gazetted by the Home Ministry.

The new levy was doubled for workers in these two sectors from RM1,800 to RM3,600 a year.

Immigration Director-General Datuk Mahmood Adam told Bernama that the department expected to implement the new rates by May 1.

However, Bernama understands that the delay in gazetting the new rates was due to the numerous protests and appeals by employers from the affected sectors.

In fact the Indian Muslim Restaurant Owners Association had threatened to increase the price of Malaysian favourites, roti canai and teh tarik, if the new rates were implemented.

Meanwhile, the Malaysian Employers Federation executive director Shamsuddin Bardan welcomed the Human Resources Ministry's decision to allow employers to deduct the levy from the workers wages, saying this was a step in the right direction.

“This decision would greatly benefit employers who had thousands of foreign workers on their payroll.”

He hoped the government would review the proposed new levy rate and maintain the existing one at least until the economy improved.

"This will give some breathing space for employers and help them to put back their businesses on a stronger footing," he said. - Bernama- Star, 16/4/2009, Employers can deduct levy from wages, again

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