Malaysia's construction sector urges government to reverse levy

The new ruling, which legally requires all employers recruiting foreign workers to now pay for the hiring levy themselves, will place an annual financial burden of RM2 billion on Malaysian contractors. 

The Malaysian construction industry has spoken out against the foreign labour levy recently imposed by the government on all employers seeking to hire foreign workers.   

Master Builders Association Malaysia’s president Foo Chek Lee is urging the Malaysian government to rescind the new ruling, also known as the Employer Mandatory Commitment, which legally requires all companies themselves to bear all foreign worker levies.

Foo said the new ruling, which came into effect January 1, will place an annual financial burden of RM2 billion on construction companies, particularly for contractors who hire mostly foreigners.

The Malaysian construction sector currently employs 900,000 foreign workers.

"The new policy will impair the cash flow of the employers and make our construction industry more expensive and less competitive," said Foo.

Although the industry is supportive of the government’s efforts to improve the plight of foreign workers, Foo added that the new ruling has caused “a lot of dissatisfaction and shocking surprises to the construction industry” because the “drastic unilateral decision” were made “without any engagement” with industry players. 

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