Multi-tier levy system soon to help reduce foreign worker dependence, says HR Minister

The Star

Companies that have a higher dependency on foreign workers may have to pay more for them, says Steven Sim.  The Human Resources Minister said the move was aimed at reducing the number of foreign workers in the country.  He said that a formula is being drafted for a multi-tier levy system to be imposed on companies based on the number of migrant workers they employ.  Read more at https://shorturl.at/dtCZ5  WATCH MORE: https://thestartv.com/c/news SUBSCRIBE: https://cutt.ly/TheStar LIKE: https://fb.com/TheStarOnline

Transcript

00:006 billion plus minus in terms of policy action by the government to reduce dependency on

00:10migrant workers, number one, but also number two, to assist the local industries to automate,

00:20to upscale, to move to a higher skilled job offer for Malaysians.

00:30So what it does is that it provides incentive for companies to lower dependency on migrant

00:41workers.

00:42What's our incentive?

00:44Formulas are still being worked out, it's still not approved yet in the Cabinet.

00:51What's our incentive?

00:52Perhaps one mechanism is a lower levy for those with a lower dependency.

00:58The more foreign workers you require, maybe we will have perhaps higher levy costs.

01:06This levy, part of this levy will be re-channeled back to assist SMEs, for example, to upskill

01:12to automate and also to train Malaysian workers to pick up higher skilled jobs within the

01:19industry.

01:20So do you think the 15% target to reduce foreign workers' dependency, 15% of our Malaysian

01:28workforce, is achievable?

01:29And what target is 2030, right?

01:32So we are now at about 15%, that's why we have stopped the approval of new quotas.

01:41But I think more importantly is to look at the future.

01:45How do we continue to assist especially SMEs, but also include MNCs because they also have

01:51demands for migrant workers.

01:52We want to be very rational in terms of migrant worker management.

01:55So sectors that are in need, we want to look at actual need.

02:02We want to look at reducing issues such as what we have seen in the past.

02:09For example, there are more workers brought in than jobs available.

02:13So applications and quotas given will be based on actual needs of the sector.

02:20And then we want to reduce, of course, middleman involvement, bureaucratic processes to make

02:28it more transparent, to make it more efficient, so that we reduce incidences or opportunities

02:34for abuse of power and corruption.

02:36So at this point, we are looking at about $2.2 million already.

02:40But even at this point, we have already stopped any application for new quota.

02:45We will definitely get feedback from the industry.

02:48In fact, I think the last month when we started it, there was already a bit of engagement

02:53with the industry players on some of the issues.

02:58But when we come out with the formula, we will engage and it will be tabled to Cabinet.

03:04So basically, the more foreign workers you hire, the higher the levy you pay?

03:08Basically, it is to incentivise companies to reduce their dependency on migrant workers,

03:15help them to upscale, help them to train up local workers or even their workers to pick

03:20up higher skilled jobs.

03:22But in terms of the wage, it seems that the 1,000 companies that you are saying that are

03:28progressive wage policy, we are going to pilot in June this year.

03:33What we are trying to do is that we know that minimum wage is very helpful and useful,

03:39but it works most positively for those in the lower income bracket.

03:46We are looking at about almost 60% wage growth for those at the lowest 10% of the wage group.

03:55But beyond that, minimum wage has minimum impact, especially on the middle wage.

04:02In fact, we have seen even a suppressed middle.

04:05And then as the wage grows higher, there is even negative growth.

04:09So we are introducing another instrument in order to improve wage compensation, which

04:16is the progressive wage policy.

04:18Basically, the government will determine a threshold, what will be known as a progressive

04:25wage threshold.

04:26Companies that pay beyond this threshold will be given a matching grant or subsidy on the

04:32wage.

04:33So this will be a voluntary programme.

04:35In June, we are targeting about 1,000 companies with a government allocation of about RM50

04:41million.

04:42Let's see how this first batch will go.

04:48Thank you.

Category

Transcript

Recommended