Wednesday, March 11, 2009

Levy on Foreign Workers Doubled - Make sure employer do NOT recover levy from workers

Many employers wrongly deduct the wages of their migrant workers to recover the 'levy' and other payments that they made to bring in the foreign worker to work for them. This is against the law - but alas there is really insufficient law enforcement by the Human Resource Ministry in this area.
He thanked the government for accepting the ministry's recommendation to double the levy on foreign workers, with the exception of the construction, plantation and domestic help sectors.

Subramaniam said the higher levy on foreign workers would make it more expensive for employers to hire them and make local workers more attractive. - New Straits Times, 11/3/2009,
Higher 'foreign' levy a boon
Now, the Malaysian government is doubling the 'levy on foreign workers' - but the hope is that employer do not just continue the practice of illegally deducting workers wages to recover what they paid.

The law on wages and deductions, in brief:-

1 - Workers should receive wages every month.

2. The total of any amounts deducted under this section from the wages of an employee in respect of any one month shall not exceed fifty per centum of the wages earned by that employee in that month. - Section 24, EMPLOYMENT ACT 1955

3. No deductions shall be made by an employer from the wages of an employee otherwise than in accordance with this Act. (section 24, Employment Act 1955)

4 - Permissible deductions, amongst other, are:-
a) deductions to the extent of any overpayment of wages made during the immediately preceding three months from the month in which deductions are to be made, by the employer to the employee by the employer's mistake

b) deductions for the recovery of advances of wages made under section 22 provided no interest is charged on the advances [section 22 limits the advances to not more than one(1) months wages -
'No employer shall during any one month make to an employee an advance or advances of wages not already earned by such employee which exceeds in the aggregate the amount of wages which the employee earned in the preceding month from his employment with such employer, or if he has not been so long in the employment of such employer, the amount which he is likely to earn in such employment during one month...'

c) deductions authorized by any other written law. (Examples of this is SOCSO and EPF, and in that law, there is clear provisions that allow for deduction from wages like ...'The amount of any contribution payable by the employer on behalf of the employee shall, notwithstanding the provisions of any written law or any contract to the contrary, be so recoverable by means of deductions from the wages of the employee due from the employer to the employee and not otherwise..."

See earlier posting - Levy, Air Fare,...cannot be deducted from Migrant Worker's is LAW.

I have perused the law, the Human Resource Ministry websites, the Immigration Department Website and the Home Ministry websites - and I have found no law, etc that permits employers to not pay foreign workers for months...or to deduct from workers wages levy, etc...

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