Thursday, February 11, 2016

For local workers, employers pay extra 13% above their income to EPF - not so for migrant workers?

As more and more Malaysian workers have lost their jobs, and/or may very soon lose their jobs, there is a concern whether there are sufficient jobs for local workers...given the already about 2.1 million documented migrant workers are in Malaysia. Malaysia allegedly also recently entered into an agreement to bring in 1.5 million migrant workers from Bangladesh. 

There is a large number of undocumented migrant workers in Malaysia - approximately 4 -6 million, in my opinion.

Employers in Malaysia, some say, they prefer migrant workers rather than local workers...WHY IS THIS?

1) Local workers cost more for every hour they work - well, for instance, when it comes to a local worker, the employer must take out a further 13% to be paid into the said worker's EPF/KWSP account - not so for migrant workers;

For a local worker earning RM900 per month, the amount of EPF contribution per year is RM1,404.

For a migrant worker - NO need to make EPF contribution.

2) One deterrent that existed was that employers were required to pay annual LEVY for each and every migrant worker they hired - but since January 2013, migrant workers had to pay the LEVY - no more employers

Annual Migrant Worker Levy - for a Migrant Worker in the  Manufacturing sector(RM1,250), Construction sector (RM 1,250), Plantation sector (RM590), Agricultural sector (RM410) and Services sector (RM1,250 – RM1,850) was so much lower. 

As, it is the amount payable annually as levy, was generally lesser than the amount of money the employer had to pay for a minimum wage local worker.

Then, in January 2013, the Malaysian government decided that LEVY will have to be paid by the migrant worker themselves - not the employer.-82 Groups - MINIMUM WAGES FOR ALL WORKERS, INCLUDING MIGRANT WORKERS - No to Wage Deduction to recover Levy Payable By Employers -

So, no LEVY for employer.

Now, the Malaysian government has informed Employers that employers will have to pay the levy - and no more the migrant worker.

NOW, the Malaysian government wants to increase the LEVY to RM1,500 - RM2,500 annually, and that the employer pays for it.

At first, I would have thought that this sum was too high ... but maybe not, considering even just the EPF contributions employers pay for local workers..

A local worker earning RM1,000 per month - EPF contribution per year - RM1,560

A local worker earning RM1,200 per month - EPF contribution per year - RM1,872

A local worker earning RM1,500 per month - EPF contribution per year - RM2,340

* Now, we have been looking at just basic wages, but EPF contribution also will be paid for all income including overtime, commissions, etc

Now, looking at these figures, maybe the proposed new LEVY rates payable by Employers of Migrant Workers may not at all be high.

In Singapore, one rationalle for levy is  'As an employer, you don't have to pay Central Provident Fund (CPF) contributions for foreign workers. However, you must a pay monthly levy for Work Permit holders.'

The only concern, is that with regard to EPF contributions, the benefit is for the worker, but when it comes to LEVY, the benefit goes to the Government...

Worker Solidarity At Risk?

Worker solidarity will be broken if Local Workers start also having an anti-migrant worker position - and this will ultimately weaker the power of unions and 'worker solidarity action' struggling for better worker rights, including working conditions.

The attempt to divide and weaken worker movements and/or unions is not NEW... employers and even pro-employer pro-business governments and politicians have been known to do this.

Of late, Najib and the BN government, decided that public sector workers minimum wages will be RM1,200 - and private sector minimum wages will only be raised later on in 2016 to RM1,000. Why did they do this? Was it an attempt to divide Malaysian workers into two - public sector and private sector workers? 

* Other benefits of migrant workers  - or really 'injustices'?

- They are bonded to one employer, no choice to change employers....(the wrongful holding of the migrant worker's passport and permit documents also makes it difficult to leave...)

-  They can be easily compelled to work long hours - 12 hours per day (after all Malaysian law stipulates unacceptable and unjust monthly overtime limit of 104 hours per month). Migrant workers are 'afraid' to say no to employers..

-  Migrant workers can easily and safely be exploited and their worker rights violated - and there will be no legal repercussions, labour court or industrial court battles...WHY? When the worker complains or claim rights, employers easily terminate them and cancel their work permits/passes. In most avenues of justice - the continued presence of the complainant/claimant is required... (If local workers, the battle for justice rages on and on...)

So, if Najib Tun Razak and the BN government is really concerned about LOCAL workers, active measures are needed...

In Malaysia - no quota limitation as to the number of migrant workers you can employ/use at your workplace..

But Malaysia also likes migrant workers - because it is a steady source of income for many others ...

REMITTANCES - this has become the 2nd highest income earner for many banks/financial institutions..

HEALTHCARE - Well, requirement for annual medical check-ups and testings; 

INSURANCE - Well, there is those mandatory Workman Compensation Insurances - provided by Insurance companies, and there is that mandatory Health insurance...

CONTRACTORS FOR LABOUR(Labour Suppliers) - like tol, they continue getting an income like 'Pimps' - the more the worker work - the more these labour suppliers earn...Employers that wish to directly employ migrant workers as their employees find that this is becoming more and more difficult to do so - because they are pushed to rather use these 'supplied workers' - who they cannot even convert to their own employees...Abolish the contractor for labour system.93 Groups:- Abolish the ‘Contractor for Labour’ system Withdraw the 2012 amendments to Employment Act 1955

So, will Malaysia really stop, or even decrease the number of migrant workers in Malaysia - would they want to even DETER employers of migrant workers - to try to get them to hire local workers?

Well, Malaysia went and signed a MOU with Bangladesh to bring in 1.5 million migrant workers over the next 3 years. 

This also goes against the previous Malaysian policy....whereby Employers in Malaysia were supposed try their best to first get Local Workers...failing which, they had to apply for permission to bring in migrant workers (the requirement required to clearly state for what position/job, and the numbers required) - but when an MOU for 1.5 million are signed - What is this? Last time, when you needed a welder, you went found a welder and brought in a migrant worker who can weld and who is suitable for that position...but now, it seems just numbers, and will that satisfy the need of the employer.

Employers want workers with a specific skill to satisfy their needs - In the past, employers(and/or their agents) also went to the country of origin to conduct interviews and tests to ensure that the migrant worker they employ has the required skills to do the work that they could not find a local worker to do despite their best efforts..

The old way was best - because it satisfied the employer's specific needs. It also was good for the migrant worker because there was employment security...

But, when you just bring in migrant workers in bulk - it is bad all around > both for the migrant worker and the employer at the workplace..

Ah...but it is 'business' for others...???


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