Malaysian employers are in a fix after the government said it is coming up with laws to curb hiring of cheap migrant labourers. After the Employer Mandatory Commitment (EMC) rule, which makes it mandatory for employers to personally pay the tax for hiring foreign workers, the Employment Restriction Act 1968 will be amended to impose a fine of RM100,000 on employers who hire migrants.
Both these new laws will be detrimental to employers who hire cheap migrant labour abundant in Malaysia. British daily The Guardian also sees these amendments as a conscious effort by Malaysia to join the Trans Pacific Partnership (TPP) after it was considered as the country where trafficking incidents are the highest.
Why the new amendment?
According to Bernama, minister at PMO Paul Low said that the amendment has proposed to raise the maximum fine from RM50,000 to RM100,000 for each illegal foreign migrant employed. He also said that a stricter action was needed to ensure foreign workers do not run away and stop the influx of illegal workers. "We hope through this amendment, employers will hire foreign migrants through the proper channels. We want to put a stop to employers hiring illegals," said the minister, according to the news website.
"The punishment for illegal foreign workers, if they are caught, is that they are most likely to be deported," he added. Low was attending a dialogue session with more than 100 industry players in Putrajaya where they were voicing concerns over the new EMC.
What is EMC?
The EMC makes it compulsory for the employers personally to pay the tax and not the employees. Previously, the levy was paid by foreign workers as the employers used to deduct a certain amount from their salaries. The new policy was adopted as it was noticed that some employers did not pay their workers according to the 2016 minimum wages policy, which is RM1,000 a month for the peninsula and RM920 a month for Sabah, Sarawak and Labuan, according to The Malay Mail.
However, the new rule has been postponed to next year as the government found it necessary to give a grace period to the employers so that they can adjust to the new policy better. "The government felt it would be appropriate to postpone it in order to comply with the requests of employers as they feel it is an extra cost to them, especially when the world economy is slowing down," said Low, as reported.