PSM would like to thank and applaud Anwar Ibrahim and the Madani Government for making Employees Provident Fund (EPF) coverage for foreign workers compulsory. Our biggest concern is that the Prime Minister has stated this will be implemented in stages, and we fear this timely move may never come to fruition. Even the Human Resource Minister did not mention this in his ten positive budget announcements for workers on TikTok, possibly due to concerns about backlash from local employers and workers.

Let me outline why this proposal is beneficial and why only errant employers will oppose it. We support this move based on the following points:

1. It is essential to have standardized worker benefits for both local and foreign workers. Failing to do so creates a greater incentive to hire foreign workers, as employers may cut costs. In fact, all laws in Malaysia—the Employment Act and the Industrial Relations Act—lack any discrimination clauses between Malaysian and migrant workers. Therefore, it is crucial that similar equality is practiced in EPF contributions.
2. This move will reduce forced labour and the illegal transfer of workers from one employer to another. Currently, many employers hire migrant labour under one company while they actually work for another. This internal outsourcing is a major reason many legal workers become undocumented. Many agents also exploit this situation. Although this method is illegal, it is widely practiced. This is how employers circumvent the government’s conditions and sector-specific quotas. By making monthly EPF contributions mandatory, the principal company will always be held responsible, thereby reducing opportunities for employers and agents to act irregularly.
3. Providing workers with EPF will also reduce the number of cases of workers fleeing from one employer to another. Having an EPF means that at the end of their tenure here, these workers will receive their hard-earned contributions, helping them return home with some extra cash to support their families. Often, workers who complete their contracts end up staying and working illegally. With the EPF, they will have a reason to go home with a lump sum of money to aid their future plans.

Teresa Kok’s suggestion that the government should significantly reduce contributions from employers of migrant workers is both ridiculous and shortsighted. She proposed that employers contribute only 1.5 percent, while migrant workers would contribute 10 percent. Currently, the employer’s contribution rate is 13 percent, while employees contribute 10 percent of their basic pay. Why should workers pay more than their employers? Such discriminatory policies against migrants reflect typical politicians appealing to the xenophobic sentiments in our society.

Previously, Lim Guan Eng suggested that minimum wage should apply only to local workers. Fortunately, the current Human Resource Minister clarified that 80% of minimum wage beneficiaries are local workers, not foreigners. This addresses allegations that Malaysian workers earn significantly more than foreign workers.

Now, imagine if all countries adopted such discriminatory policies, depriving Malaysian workers overseas of their rights.

Many employers strongly argue that they need foreign workers, claiming that Malaysian workers do not want these jobs. During ministry town halls, some have even told me they are willing to pay more than the Malaysian minimum wage, yet Malaysian workers remain uninterested. When the government increases the minimum wage and mandates EPF contributions, these large companies must be prepared to absorb these costs. They need to understand that foreign labor is not cheap labour; if they insist on using it, they must be willing to pay fairly.

Similar schemes exist in many other countries, and Malaysia is aligning with global standards. We would not want our citizens employed overseas to face discrimination. Teresa Kok’s comments are not only in bad taste; they would facilitate further exploitation of migrant workers.

Her proposal to reduce costs for employers means greater incentives to hire migrant labour over local workers.

PSM strongly believes that migrant workers perform the most dangerous, difficult, and dirty (3D) jobs that many locals refuse to do. It is morally and justly correct for them to receive a decent wage, and providing them with EPF would honour their labour.

S. Arutchelvan
Deputy Chairperson
Parti Sosialis Malaysia
26-10-2024