KUALA LUMPUR (April 16, 2009) : There is good news for employers - they are now re-allowed to deduct the levy from the wages of the their foreign workers until the expiry of their present visas, Labour Director-General Datuk Ismail Abdul Rahim said today.
S. Subramaniam
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They had earlier been directed by the department to stop such deduction, effective April 1, causing much uneasiness among employers as they had to bear the cost of the levy, and this upset their budget.
The directive was therefore reversed by the Human Resources Minister Datuk S.Subramaniam today following numerous appeals by employers, Ismail told Bernama.
However, Ismail explained that no deduction would be allowed for new employees registered after April 1 in line with the government’s policy requiring employers from all sectors to bear the full cost of the levy from that cut-off date.
The rationale to get employers to bear the levy was to discourage them from employing foreigners, he said.
Nevertheless, Ismail hoped the new decision would ease the burden of employers during this economic downturn.
Meanwhile, the Immigration Department has yet to implement the new levy rates for foreign workers in the manufacturing and services sectors because it had not been gazetted by the Home Ministry.
The new levy had been doubled for workers in these two sectors from RM1,800 to RM3,600 a year.
Immigration Director-General Datuk Mahmood Adam told Bernama the department expected to implement the new rates by May 1.
However, Bernama understands that the delay in gazetting the new rates was due to the numerous protests and appeals by employers from the affected sectors.
In fact, the Indian Muslim Restaurant Owners Association had threatened to increase the price of Malaysian favourite indulgence, roti canai and teh tarik, if the new rates were implemented.
Meanwhile, the Malaysian Employers Federation executive director Shamsuddin Bardan welcomed the Human Resources Ministry’s decision to allow employers to deduct the levy from the workers wages, saying this was a step in the right direction.
He hoped the government would review the proposed new levy rate and maintain the existing one at least until the economy improved.
“This will give some breathing space for employers and help them to put back their businesses on a stronger footing,” he said. - Bernama
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