Malaysia’s Human Resources Minister, Steven Sim said companies that have a higher dependency on foreign workers may have to pay more for them. He said the move was aimed at reducing the number of foreign workers in the country. Sim added that a formula was being drafted for a multi-tier levy system to be imposed on companies based on the number of migrant workers they employ. “Our target is to table it to the Cabinet this year. Implementation of the multi-tier levy will be done by the end of this year, if not by next year.”
Revenue from the multi-tier levy would be channelled to upskill local workers, particularly from small and medium enterprises (SMEs), he added. He said initial engagement with the relevant stakeholders and industries had just begun to gather feedback to work out the formula. “The multi-tier levy system is to incentivise companies to reduce their dependence on migrant workers and help them train their local workers, or for local workers to take up higher-skilled jobs,” he said. Sim noted that the government has set a target of 2.4 million migrant workers in the country by next year. Based on Home Ministry records, there were about 2.12 million foreign workers in Malaysia as of February this year.
Industry players said in January that they were preparing to embrace the multi-tier levy system (MTLS) as a means to decrease reliance on foreign workers and advance automation. The MTLS is a component of the 12th Malaysia Plan, aimed at reducing foreign worker dependency to below 15 per cent. Currently, the foreign worker levy is RM640 per person for the plantation and agricultural sectors, while the manufacturing, services, mining, and construction sectors pay a levy of RM1,850 per foreign worker.
