Deputy Prime Minister, Datuk Seri Dr Ahmad Zahid Hamidi on 31 December 2016 said employers in construction, manufacturing and services sectors can no longer deduct the levy of their foreign workers in their respective salaries as they would be responsible for it, effective 1 January 2017.
This means that the construction sector will have to bear an additional cost of more than RM2 billion per year, reported Bernama.
This comes as the foreign worker levy was also increased to RM1,850 per worker from RM1,200 less than a year ago, said MBAM president Foo Chek Lee.
“With the implementation of this policy, this will mean added cost for other supporting industries which may result in further increase in overall cost for the construction industry,” he said.
He noted that such huge amount of monies will also impair the employer’s cash flow and make construction more expensive and less competitive as the additional cost may ultimately be passed on to end-buyers.
“We strongly believe this amount (RM2 billion) can be utilised by our local industry to adopt new technologies and mechanisation to improve and increase productivity and thus reduce dependency on foreign labours in the long-run.”
Lee explained that switching the levy could see foreign workers serving pre-existing contracts demand the same terms which could lead to chaos within the industry.
“The present legal foreign workers have been contracted with the condition that the foreign workers pay the levy for their right to work in our country,” he said.
“Changing this policy midway will not only benefit the foreign workers but will also severely impact the morale and cause dissatisfaction among local workers.”
Image sourced from Professional24x7
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my
