The Philippine Embassy in Kuala Lumpur welcomes the deferral of the increased levies for foreign workers and calls for further review of the levy structure.

“The deferral provides a welcome breather for employers and employees at this time of economic difficulties, and allows an opportunity to conduct a thorough review of the levy system,” Ambassador J Eduardo Malaya said.

The Malaysian government earlier imposed a restructuring of the foreign workers levy system into two levels, as well as corresponding increases. Employees will have to pay RM2,500 if to work in the manufacturing, construction and services sectors; and RM1,500 in the plantation and agriculture sectors. Malaysia has some 2.1 million registered foreign workers.

This is also an increase from the RM1,250 in the manufacturing, services (island resorts) and construction sectors in peninsular Malaysia, and RM1,010 for the same sectors in Sabah and Sarawak; RM590 in the plantation sectors and RM410 in the agriculture sectors in both peninsular Malaysia and in Sabah and Sarawak; and RM1,850 in peninsular Malaysia and RM1,490 in Sabah and Sarawak for the services sector.

The levy is paid annually. The levy for household service workers remains the same at RM410.

The proposed move has been met by much opposition from employers’ groups and key sectors, saying that this would greatly impact recruitment of needed workers as well as their profits.

Before workers are given visas to come to Malaysia, payment of the levies imposed on the workers are often advanced by their employers. The workers then have to pay off the levy through salary deductions.

Every time their one year validity working visas are renewed, a levy has to be paid. In effect, these workers get a lower take-home pay in light of the levies.

In previous years, the levies were shouldered by the employers.

Most of the affected foreign workers come from Indonesia, Myanmar, Cambodia, Nepal, and Bangladesh. The Philippines has some 10,000 workers in the affected sectors.

Based on data from the Embassy’s Philippine Overseas Labour Office, there has been a decrease in the number of job contracts that are submitted to their office for verification, in light of recent developments.