KUALA LUMPUR — The mandatory 2% contribution to the Employees Provident Fund (EPF) for foreign workers is a means to help the government register all foreign workers, the Prime MInister said today.
Datuk Seri Anwar Ibrahim, who is also the Finance Minister, told the Dewan Rakyat the required contribution did not mean the government would neglect the interest of local workers.
“The minimum contribution of 2% gives the government the opportunity to register the total number of foreign workers,” Anwar said in reply to Chiew Choon Man (Miri-PH) during the Prime Minister’s Question Time today.
“The savings are permanent and they (foreign workers) will be encouraged to withdraw them when their service period and work permits here expire.
“EPF and the Finance Ministry have engaged with all companies and with micro and small and medium enterprises,” Anwar (Tambun-PH) added.
The prime minister said mandating EPF contributions for foreign workers was also part of Malaysia’s obligations under the International Labour Organisation (ILO).
“Almost 70 countries mandate contributions for foreign workers, and most of them impose higher contributions. Here we are requiring the minimum, which is 2%, as we believe 2% will not be burdensome (on employers)”, Anwar said.
Chiew had asked the Prime Minister to clarify the mandatory EPF contribution for foreign workers and whether this would distract the fund from its focus on building retirement savings for Malaysian citizens.
Anwar said it would not as EPF had various voluntary contribution schemes for citizens in different categories, including those working in the informal sector and for housewives, to build their retirement savings.
Amendments to the EPF Act 1991 to enable the mandatory 2% contribution for foreign workers were tabled for first reading in the Dewan Rakyat today. As the current sitting concludes this Thursday, the bill’s second reading and debate is to be held in the next sitting, which begins in June.
EPF CEO Ahmad Zulkarnain Onn was reported saying on March 2 that the amendments will around 2.5 million foreign workers included in the EPF.
The mandatory contribution was announced by Anwar when tabling Budget 2025 last October with the aim of providing fair treatment to all workers regardless their nationality. – March 4, 2025