EPF for Migrant Workers: Malaysia seeks to align with global labour standards, boost investment competitiveness
Astro Awani
December 18, 2024 22:30 MYT
December 18, 2024 22:30 MYT
Malaysia’s proposal to extend Employees Provident Fund (EPF) contributions to migrant workers is being hailed as a strategic move to align with global labour practices and enhance its appeal to international investors. File pic by EPF
KUALA LUMPUR : Malaysia’s proposal to extend Employees Provident Fund (EPF) contributions to migrant workers is being hailed as a strategic move to align with global labour practices and enhance its appeal to international investors.
Professor Niaz Asadullah, Southeast Asia Lead of the Global Labour Organisation, said the proposal signals Malaysia’s commitment to equitable labour policies and modernisation of its economy.
“This is about equity, worker dignity, and sending a clear message to the global business community that Malaysia is ready to compete on fair and competitive terms,” he said.
The country has long relied on low-wage foreign labour, supported by policies that created unequal provisions for migrant workers.
According to him, these practices artificially lowered costs for businesses but hindered Malaysia’s efforts to transition to a high-productivity economy.
“This dual-track system not only trapped Malaysia in a low-wage, low-productivity cycle but also damaged its international reputation,” he said, citing reports of labour-related corruption and illicit worker trade.
“Mandatory EPF contributions for foreign workers are part of a broader effort to formalize labour practices and align with International Labour Organization (ILO) conventions," he said in Astro AWANI's Consider This programme on Wednesday.
However, the proposal has sparked concerns among local businesses, particularly those heavily reliant on migrant workers.
Another panel on the show, Gopal Kishnam Nadesan, Secretary-General of the Labour Solidarity and Learning Resources Association (LLRC), acknowledged that the change might impact profit margins but argued that the benefits outweigh the costs.
“SMEs and big businesses depend on migrant workers because they’ve been cost-effective,” Gopal said.
“While mandatory EPF contributions will reduce profit margins, it won’t hurt businesses overall. This is a necessary step for Malaysia to modernise and compete globally.”
The proposal is part of Malaysia’s broader strategy to elevate labour standards, attract ethical investors, and transition to a high-value economy.
As the government seeks to balance competitiveness with social equity, the initiative underscores Malaysia’s readiness to meet global expectations and strengthen its position in the international market.