Malaysia defends mandatory 2% EPF contributions for foreign workers

Malaysia's mandatory 2% Employees Provident Fund (EPF) contribution scheme for foreign workers is gaining traction, the Finance Ministry said, as it moved to defend the policy amid ongoing implementation. According to the ministry, 78,129 employers have begun making the mandatory contributions since the scheme's introduction, demonstrating widespread acceptance across the business community. The figure underscores employer compliance and signals confidence in the initiative designed to provide greater social protection for migrant workers in the country. Small and medium-sized enterprises (SMEs) account for 86% of employers making contributions, reflecting the policy's reach across Malaysia's diverse business landscape. The strong participation from SMEs is particularly significant given their importance to the Malaysian economy and their role as major employers of foreign workers across various sectors. The mandatory contribution represents a step toward extending employment benefits to the country's substantial migrant worker population, which plays a crucial role in supporting key industries ranging from manufacturing to services.