January 30, 2013

Foreign Workers Levy shall be borne by foreign workers

Source: MEF
  1. The Press Statement by YB Menteri Kewangan II, Dato’ Seri Ahmad Husni Hanadzlah released on 30th January 2013, states that the Cabinet has decided that with immediate effect foreign workers levy shall be borne by the foreign workers and no more by employers. However the new levy policy will apply to new foreign workers or when they renew their work permit, study or visit passes.      
  2. Please note that based on the above announcement the levy already paid by employers for the foreign workers prior to 30th January 2013 cannot be recovered from the foreign workers for the remaining period of the work permit.
  3. The levy collection was introduced in 1992 and paid for by the foreign workers. The levy was imposed on the workers because of the expenses borne by the Government in providing general facilities such as health care and other public facilities. However with effect from April 2009, the Government decided that the employers were required to pay the levy as a measure to manage the inflow of foreign workers.
  4. The Press Statement also explains that with the implementation of minimum wage, all workers including foreign workers will receive increase of wages on an average of between 30% and 50 % or from RM 600-RM 700 to RM 900 a month. The move to require foreign workers to pay the levy will not be a burden on them as the levy they need to pay is between RM 34.16 and RM 154.16 a month compared with the general increase in salary between RM 300 and RM 500 per month.
The above move by the government will reduce the overall hiring cost of foreign workers .
(The English translation by MEF of the Press Statement by the Minister is attached herewith)
Thank you
Hj Shamsuddin Bardan
Executive Director

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