SME association slams call to increase employers' share of EPF

The Small and Medium Enterprises Association of Malaysia (Samenta) has opposed a call for increased contributions by employers to the Employees Provident Fund (EPF).

According to its chairperson William Ng, the government should instead focus on creating higher-value jobs for locals.

“An increase to EPF (contribution) at this juncture of the country’s economic recovery is not only counter-productive, but it will also do more harm than help to Malaysians.

“We urge the cabinet to reject this opportunistic demand by that fringe workers’ group, and instead focus on creating higher value jobs for Malaysians and helping Malaysian businesses and workers to be more productive,” Ng said in a statement today.

He was responding to a recent request by the Union Network International-Malaysia Labour Centre (UNI-MLC) to raise employers’ contribution rate to the EPF from the current 13 percent to 20 percent, especially for employees earning RM4,000 and below, to ensure they have sufficient savings when they retire.

Prime Minister Anwar Ibrahim said that the request will be brought to the cabinet for discussion.

SMEs hit badly

Elaborating, Ng said the country’s post-pandemic economic recovery remains fragile and small and medium enterprises continue to trail behind larger firms in terms of growth.

“This uneven recovery is further compounded by rising costs, which hit our SMEs as severely as they do consumers in general.

“We must remember that our SMEs have had to endure two rounds of increment in minimum wages since 2020, despite Covid-19, despite a severe dip in our gross domestic product and despite a drop in labour productivity,” he said.

“We were also forced to adopt higher employee benefits, including longer maternity leaves and lower threshold for overtime pay. We are still waiting for an answer from the government to our plea for these increased costs to be subsidised as practised in Singapore and the UK,” he added.

He stressed that SMEs stomached calls by the government to keep employers despite the pandemic and even endured cost increases along the way.

“The fact is, our margins are at the lowest point in recent history; SMEs have done our part in helping Malaysia recover, and there is simply no more money to give.

“We must instead increase the income of Malaysians by creating more high-value industries and jobs, encourage Malaysians to save more, and protect our SMEs at all costs so that Malaysian jobs and livelihoods are protected.” - Mkini