Report: Sarawak employers need not foot foreign workers levy

The Employment Mandatory Commitment (EMC), mandating employers to foot the levy for their foreign workers, does not apply in Sarawak, reports the New Straits Times.

The English daily quoted a press statement issued yesterday by Sarawak’s Deputy Home Affairs Minister Masir Kujat, relating that Sarawak is exempted from the EMC.

The new policy, which came into force on Jan 1, was met with strong protest from employers in the peninsula.

The report also quoted the Sarawak Oil Palm Plantation Owners Association (Soppoa), which expressed relief over the exemption.

“It is actually in the interest of Malaysia's economy that the levy is borne by the foreign workers. It is a shocking decision to force employers to pay the annual levy for foreign workers.

“This sudden announcement was made without prior consultation with or notification of relevant stakeholders, like our members,” Soppoa said in a statement.

It said such a knee-jerk ruling is detrimental to the industry, as it will inevitably place additional burden on the oil palm industry, which is already the most heavily taxed in Malaysia.

Soppoa argued that the operational cost of managing oil palm estates has risen steeply over the years, mainly because of the increase in the minimum wage. Any further increase in palm oil production costs is bound to erode the competitive edge of Malaysia's oil palm industry.

The employer's group urged the government to consult with industry members before implementing any measure that may impact them.

Deputy Prime Minister Zahid Ahmad Hamidi recently announced that employers would have to pay the levy for foreign workers they recruited, beginning this year.

Zahid, who is also home minister, reportedly added that under the EMC, employers can no longer deduct levy from the wages paid to their foreign workers. This is to ensure that employers bear full responsibility for the foreign workers they hire.- Mkini