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New Foreign Worker Levy Rates for Peninsular Malaysia

On 1 Feb 2015, the Minister of Home Affairs announced increases in foreign worker levy rates of between 35% and 265.9%.

MEF has strongly opposed the new levy rates and held a meeting with the Secretary General of the Ministry of Home Affairs together with representatives of 28 Industry Associations on 16 February 2016. MEF together with 28 Industry Associations submitted a joint memorandum dated 1 March 2016 urging the government not to review the levy rates.

However the Secretary General of the Ministry of Home Affairs announced the revised levy rates, effective on 18 Mar 2016, as follows:

Category 1: Manufacturing, Construction & Services sectors – RM1,850 per foreign worker;
Category 2: Plantation & Agriculture sectors – RM640 per foreign worker.

The table on the categories and levy rates as announced by the Secretary General of the Ministry of Home Affairs are as below:

The new levy rates entailed an increase of RM600 for the Manufacturing, Services and Construction sectors, and RM50 and RM230 for the Plantations and Agriculture sectors respectively. The new levy rates are applicable for Peninsular Malaysia only.

The Ministry of Home Affairs justified the increase in levy rates as foreign workers also utilise public facilities, amenities and infrastructure.

Please be informed that the blanket approval granted by the Director General of Labour effective from 9 April 2013, as per MEF Circular AG 17/2013 dated 9 July 2013 to allow employers in Peninsular Malaysia and Federal Territory of Labuan to make deductions from the wages of foreign workers in respect of levy paid in advance by employers, is still applicable.

However, new intake of foreign workers is frozen indefinitely as emphasis is currently on the Rehiring Programme which is currently being implemented from 15 February to 30 June 2016.

For more information and assistance

Malaysian Employers Federation
Phone: 603-7955
Email : mef-hq(@)mef.org.my
www.mef.org.my

 

Source: Malaysian Employers Federation (MEF) Circular AG3/2016

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