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FMM Press Statement: Suspend On-Going Raids and Further 6-Month Extension of Foreign Worker Rehiring Programme & Review of Minimum Wages Rate to Take Effect from 2019

Kuala Lumpur, July 13, 2018 - 109 industry associations and chambers jointly submitted to the Ministers of Home Affairs and Human Resources proposals on the Foreign Workers Rehiring Programme and Minimum Wages on July 13, 2018, to call for:
  • Extension of legalisation period for six months based on the 6P Amnesty programme conditions 
  • Suspend on-going raids until the legalisation process is completed
  • Any proposed increase in MW rate should take effect only in 2019.
Foreign Worker (FW) Rehiring Programme

Following termination of the rehiring programme on June 30, 2018 and the immediate launch of Ops Mega 3.0 in a nationwide crackdown to detain illegal FWs, genuine employers whose applications to legalise workers had been delayed, mainly by third party agents, are badly affected and their business operations disrupted.

The joint proposal requested that applications be handled directly by and submitted to Immigration counters nationwide, or online if a system is available. Conditions for legalisation should adopt the 6P Amnesty programme which required workers to be medically fit, have valid passport for 12 months, no criminal record and at minimal costs. Strictly no third party agents or service providers! Clear and transparent process and client charter to ensure fast, efficient and clean processing. Work permits for legalised workers should be valid for at least one year. The relevant Embassies should facilitate quick issuance of passports to their nationals. 

Employers under voluntary surrender should not be blacklisted. There should not be restrictions or freeze on recruiting new workers from source countries while legalisation is in progress. There should be strict enforcement once the legalisation period ends and open recruitment system for all; and a redress mechanism to address human trafficking. The joint organisations also called for a Single Ministry to handle all human resource matters in the country including FWs to ensure fair, comprehensive, long term and holistic manpower planning. 

Minimum Wages (MW)

The Government should honour its election promise to share the increase in MW with employers. Current MW rates should not increase immediately to RM1,500 but spread over the five year period with the first increase in 2019. However, the intention to standardise MW rates in Sabah and Sarawak with the Peninsular should be reviewed as the former would not be able to sustain the significant increase. Concurrently, the allowable monthly housing deduction for FW should be increased from RM50 to RM150. Implement multi-tiered (market-based) levy mechanism including ploughing back levy collected to support industry’s automation and adoption of Industry 4.0 technologies; but in the meantime, levy burden should revert back to FWs.

The definition of MW should be reviewed as total remuneration i.e. basic wage AND all fixed cash payments and allowances defined as wages under Section 2 of Employment Act 1955 (EA). MW increase must commensurate with productivity gains with greater effort towards implementing the productivity-linked wage system. 

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The Federation of Malaysian Manufacturers (FMM) has been the voice of the Malaysian manufacturing sector since 1968. Representing over 10,000 member companies (3,000 direct and 7,000 indirect) from the manufacturing supply chain, FMM is actively engaged with government and its key agencies at Federal, State and local levels. FMM is also well-linked with international organisations, Malaysian businesses and civil society. Apart from benefitting from FMM’s advocacy, FMM members enjoy value-add services, including training, business networking and trade opportunities as well as regular information updates.

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