NOT only that the proposal to up the employers’ contribution portion to the Employees Provident Fund (EPF) to 20% from the current 13% will affect the national economy but there is also very high likelihood that no employers will be agreeable to such proposal as it poses a major financial burden to business owners.
This multi-fold burden on businesses is obvious as the proposed rate is deemed “very steep” compared to the current rate of only 13%, according to PAS Women wing’s deputy chief Salamiah Mohd Nor.
At the same time, the Temerloh MP reckoned that any hike would lead to an increase in operating costs – not only in terms of the workers’ wages – but also contributions to the welfare of the workforce.
“If employers are coerced to contribute to their workers’ welfare, this will indirectly put pressure on them,” Salamiah told HarakahDaily.
“If supposedly the Prime Minister consented to the hike, surely employers or business owners will minimise the hiring of employees to mitigate a surge in operating costs. Worse still, some errant employers will resort to not registering the workers they hire with the EPF so as to avoid making any contribution.”
Added the Pahang PAS Women’s head: “Therefore, the proposal to raise employers’ contribution to 20% will present a risk to the workers themselves if their employers refuse to contribute to their retirement savings.”
For context, Prime Minister Datuk Seri Anwar Ibrahim who launched the Labour Day celebration in Putrajaya yesterday (May 1) has said that calls by workers for employers to contribute 20% towards their EPF will be discussed.
Anwar who is also the Finance Minister was asked to comment on the Union Network International-Malaysia Labour Centre’s (UNI-MLC) 12-point request which included raising employers’ EPF contributions and the retirement age.
Presently, employees contribute 11% of their monthly salary to the EPF while employers contribute another 12% or 13% of the salary depending on the statutory contribution rate.
As it is, Salamiah claimed that many employers in Malaysia have been refraining from registering their employees with EPF to avoid this contribution cut.
“Supposedly the government agrees with the 20% rate, not only that more employers will find excuses not to register their workers with EPF, but they would also pass down their cost increases by means of price increase of consumer goods,” added the Perikatan Nasional (PN) Pahang head. – May 2, 2023
