Published May 4, 2009

No tax hike on migrant workers

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(KUALA LUMPUR) Malaysia has scrapped plans to double an annual tax that restaurants and factory owners pay for employing migrant workers following fears that employers might lay off nearly 400,000 people, news reports said on Saturday.

Human resources minister S Subramaniam said the Cabinet has deferred the hike indefinitely because businesses were struggling with economic uncertainties, The Star and New Straits Times newspapers reported.

The government had said in March that it would double the yearly levy for each migrant worker to RM3,600 (S$1,500) to curb the country's reliance on foreign workers and to enable unemployed Malaysians to fill potential vacancies.

Human resources ministry officials could not immediately be reached on Saturday.

The plantation and construction sectors would have been exempted from the hike, but employers had warned that food outlets were at risk of shutting down and laying off some 375,000 workers because they cannot afford the extra costs.

Mr Subramaniam earlier told reporters that regulations governing part time work for public and private sector workers after normal working hours are expected to come into effect in June.

He said his ministry was in the final stages of formulating the regulations for this under the Employment Act of 1955.

'At present, the government allows civil servants to do part time work but a number of issues have arisen because there are no specific regulations on this,' he said at an event on Friday.

He said the regulations would define the parameters on part time work and help utilise the resources of Malaysian workers, thus lessening the dependence on foreign workers.

Malaysia employs more than two million foreign labourers, mainly from other Asian countries such as Indonesia, India, Bangladesh, the Philippines and Myanmar. Many of them work in low-paying menial jobs shunned by Malaysians. -- AP, Bernama