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Groups shocked by govt's new levy rule to favour employers

06 February 2013

67 organisations representing trade unions, youth movements and migrant rights groups have expressed shock over the cabinet's decision to allow employers deduct foreign workers' levy from their wages.

"We call on the Malaysian government to immediately rescind the decision made by the Malaysian cabinet on Wednesday (30 Jan 2013) to allow employers of migrant workers to recover the levy they pay the government by deduction of wages of migrant workers.

"We take the position that all workers, including migrant workers, are entitled to receive minimum wages, whereby this is the basic wage and should not include allowances, benefits and other work incentives," the statement signed by among others National Union of Banking Employees, Malaysian Trade Union Congress, Tenaganita and other organisations involved in labour rights.

They pointed out that since the minimum wage was announced by the government, employers have been trying to bend the rules to avoid increasing wages.

This includes 'restructuring' of a worker's salary by including all other allowances, incentives and benefits to make up the RM900 minimum requirement.

"Some employers are making employees to sign documents agreeing to these changes, whereby this is made easier when there are no worker unions. Workers generally have no avenue of complaint, or even choice in the matter especially when many now are employed based on short-term employment contract," the statement added.

Exploited but preferred

The groups chided the government's decision to allow some 500 companies to postpone the implementation of the new wage policy, and took to task Second Finance minister Ahmad Husni Hanadzlah's reasoning that allowing to deduct foreign workers levy from their wages is to alleviate the hiring cost for employers.

"If the Malaysian government now wants to reduce the financial burden of employers who hire migrant workers, then rightfully the government should reduce or remove the levy – not shift the burden to workers," the groups added.

The statement also reminded that foreign workers had sacrificed family and financial savings in order to come to work, and were also barred from getting married during their employment period.

"They also end up incurring substantial debt when they come, for they have to pay, amongst others recruitment agents, most times these payments include both legal and 'illegal' payments," it added, while saying that the current weaknesses in the country's laws make foreign workers the preferred choice.

"Until laws and policies are amended to protect migrant's worker rights, naturally migrant workers become the preferred choice over local workers as they are certainly a more easily exploited class of workers."

FMT News, 5/2/2013, Revoke levy decision, govt told