EPF for migrant workers will encourage firms to hire locals - activist

A social activist has lauded the government’s proposal to enrol all migrant workers as Employee Provident Fund (EPF) contributors.

Charles Hector said at present some companies may prefer to hire migrant workers so they don’t have to pay for the employee’s EPF, meaning there’s less incentive to hire locals.

“When EPF payments are required for all workers, it betters the chances that employers will employ more local workers.

“If they want to employ migrant workers, they still have to fork out money to bring in and send back migrant workers to their country of origin, pay for permits, health checkups, etc - but now with the EPF obligation, the chances that local workers are employed increases,” he said in a statement today.

He added that enrolling in EPF also benefits migrant workers, giving them a lump sum from their EPF savings to bring home once their employment in Malaysia ends.

EPF can also be an additional monitor to ensure that companies don’t cheat migrant workers out of their wages.

Separately, Bagan MP Lim Guan Eng proposed in the Dewan Rakyat today that employers be allowed to use EPF contributions to offset any fines, penalties, or losses imposed on companies as a result of wrongdoing by migrant workers.

He said if the International Labour Organization now allows such an offset, the government can consider the South Korean way of having an insurance system in lieu of EPF contributions.

Delay migrant workers' EPF contribution plan by 2 years - group

Low wages influencing inadequate EPF savings, says its chairperson

Anwar tables RM421b Budget 2025 for the '85pct'

Budget 2025: NGOs want more, better-targeted welfare spending