KUALA LUMPUR: Seputeh member of parliament Teresa Kok proposed that the Employees Provident Fund (EPF) contribution for foreign workers be set at 1.5 per cent from employers and 10 per cent from the workers.
"So if a foreign worker's basic salary is RM1,700, the employer's contribution of 1.5 per cent would amount to RM25.50, while the employee's contribution would be RM170, totalling RM195.50 in EPF contributions.
"The amount is almost RM200, which is equal to the minimum wage increase for next year," she said when debating the 2025 Supply Bill.
Kok said considering that the government had increased the minimum wage from RM1,500 to RM1,700 per month, it was difficult for many employers who hired foreign workers to bear the RM200 wage increase, while also paying the EPF contributions for them.
"If the salary of a foreign worker is set at RM1,700, the employer's EFP contribution is RM221.
"If we add the wage increase of RM200 in the 2025 Budget , the total cost borne by the employer for one foreign worker amounts to RM421.
"This does not include the Social Security Organisation (Socso) payments, accommodation costs and other expenses."
The current EPF contribution rates are 13 per cent by employers and 11 per cent by employees.
She said the current rates would see the employer's contribution to EPF per foreign worker at RM221, based on the minimum salary of RM1,700.
She said EPF contributions to foreign workers would help prevent them from fleeing their employers and deter syndicates that "stole" foreign workers who had just arrived in Malaysia.
"In addition, the EPF contributions for foreign workers help them build their savings.
"When their employment in Malaysia ends, their savings in the EPF would be around RM20,000 or RM30,000.
"The amount could help cover their expenses for returning to their home country."
During the tabling of the 2025 Budget on Oct 18, Prime Minister Datuk Seri Anwar Ibrahim announced that the government planned to make it mandatory for foreigners working in Malaysia to contribute to EPF.
Contributions to EPF are mandatory only for Malaysians, though non-citizens can register as members.
Anwar said the proposal for mandatory contributions from non-citizen workers would be implemented in phases.