Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
Employees prefer more take-home pay while employers, mostly from small and
medium sized companies, want to cut cost, and both even sign agreements to evade
EPF payments. This trend is said to be prevalent now with the rising cost of
living.
<p>EPF’s deputy chief executive officer (management & organisational
development) Rusma Ibrahim said employers would still be liable even if they
had signed an agreement with their employees to avoid making contributions.
</p>
<p>“If an employee lodges a report to EPF after he resigns from the company,
the employer has to pay not only their EPF share, but also the employees’
share and dividends,” she said. </p>
<p>Small companies tend to give excuses that it was a hassle to fill forms but
Rusma said it would only take less than 15 minutes to fill up monthly pre-printed
remittance forms of 10 employees. They can also choose e-forms and pay online.
</p>
<p>She said that monthly, an average of 40 company directors, mainly from the
small companies in the Klang Valley, were being issued court orders to have
their assets seized for defaulting court ruling to make EPF contributions. </p>
<p>About 80% of employers registered with EPF were made up of such small sized
companies. </p>
<p>Last year, 8,800 out of 400,000 employers registered with EPF, or 2.35%, defaulted
in payments, said Rusma. </p>
<p>This was, however, down from 4.14% of employers who defaulted in 2002, and
it was a hefty 20% 15 years ago. </p>
<p>Rusma attributed the low figures to greater awareness and better enforcement
methods. </p>
<p>SMI Association of Malaysia secretary-general Lee Teck Meng said the RM800-RM1,000
average income of workers was not enough for them to survive in cities, hence
they evade EPF contribution for more take-home pay. </p>
<p>When asked if workers think about future savings, Lee said: “If they cannot
survive reasonably now, how can they think about their future? However, we tell
our members they must contribute to EPF.” </p>
<p>“Workers’ economic situation have worsen since 1997, and the increase
in oil prices and inflation rates have added to their hardship,” he said.
</p>
<p>EPF has no figures on employees affected by defaulting employers. </p>
<p>Malaysian Trade Union Congress secretary general G. Rajasekaran said it could
be at least 200,000, however, no one knows the figures of employers not registered
with EPF. </p>
<p>“Moreover, increasing number of big companies hiring contract-for-service
workers compounded the problem because they were not obliged to pay EPF,”
said Rajasekaran.
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