Guan Eng says foreign workers should be excluded from minimum wage hike, calls for EPF levy repeal

On September 29, DAP chairman Lim Guan Eng urged the Malaysian government to exclude foreign workers from any forthcoming increase in the country's minimum wage. In a statement, Lim contended that such a move would safeguard local businesses, especially micro, small, and medium enterprises (MSMEs), from escalating operational expenses.

Lim anticipated Prime Minister Anwar Ibrahim would announce the minimum wage revision during the Budget 2027 presentation on October 9, following the government's assessment that wage growth has not kept pace with worker productivity and corporate profits.

While acknowledging the need for higher wages, Lim expressed concern among local businesses already facing intense competition, increased compliance costs, taxes, and pricing pressures from overseas producers. MSMEs, he noted, form the backbone of the domestic economy and are currently grappling with a sluggish economic situation. Lim advocated for consultation with these businesses before implementing any policy changes.

Lim argued that any increase in the minimum wage should exclusively apply to Malaysian workers, stating that foreign employees should not receive the benefit as they were hired under mutually agreed contracts. He reiterated his call for the immediate repeal of the mandatory two percent Employees Provident Fund (EPF) contribution for foreign workers, arguing that the requirement places an unnecessary burden on employers without offering meaningful advantages to migrant workers.

According to Lim, exempting foreign workers from minimum wage increases and abolishing the EPF contribution requirement would alleviate cost pressures on local businesses and ensure the survival of approximately 1.2 million MSMEs nationwide. He urged the government to prioritize the interests of domestic enterprises and prevent policies aimed at raising wages from inadvertently impeding the competitiveness of Malaysian businesses.