Guan Eng wants 2pct EPF contribution for foreign workers scrapped

KUALA LUMPUR: DAP adviser and former Finance Minister Lim Guan Eng wants the government to exclude foreign workers from any future minimum wage increase.

He said this was necessary to protect Malaysian workers and local businesses.

Lim also wants the Employees Provident Fund (EPF) 2 per cent contribution requirement for foreign workers to be scrapped, saying it placed an additional burden on local employers and micro, small and medium enterprises (MSMEs).

"Protect MSMEs and prioritise local businesses first by excluding foreign workers from benefiting from any minimum wage increase," he said in a Facebook post last night.

He said foreign workers should not benefit from higher minimum wages as their employment was based on contracts agreed between them and local employers.

Lim's remarks followed Prime Minister Datuk Seri Anwar Ibrahim's statement that the gap between corporate profits and workers' wages would be addressed in Budget 2027, to be tabled on Oct 9.

Anwar said a firmer approach was needed to address the issue and ensure workers and employers benefited more fairly from economic growth.

The current RM1,700 minimum wage, which took effect on Feb 1, 2025, applies to workers in the private sector, including non-Malaysian workers, except domestic workers and those under apprenticeship contracts.

Lim said Anwar's remarks about a possible increase in the private-sector minimum wage had caused concern among local businesses, particularly MSMEs.

He said they were already facing intense competition, including price cuts by foreign producers, as well as the introduction of taxes and higher compliance costs.

"Amid a relatively sluggish economy, the government is expected to engage with affected businesses and MSMEs," he said.

Mandatory EPF contributions for non-Malaysian workers took effect from wages for October 2025.

Under the current arrangement, both the employer and employee contribute 2 per cent of monthly wages, with domestic workers excluded from the mandatory coverage.