SMEs urge exemption for existing foreign workers from EPF scheme

KUALA LUMPUR — Small and medium enterprises have expressed strong opposition to mandatory Employee Provident Fund contributions for foreign workers, prompting legislative concerns about the financial burden on businesses already operating in Malaysia.

Bagan MP Lim Guan Eng has called on the government to exempt existing foreign workers from the proposed requirement, citing concerns raised by the SME sector. The move reflects growing anxiety among business operators over additional compliance costs at a time when many enterprises continue to navigate post-pandemic recovery challenges.

The government's push for mandatory EPF contributions for foreign workers is intended to enhance social protection and ensure equitable treatment across the workforce. However, business representatives argue that applying the requirement retroactively to existing workers could impose unexpected financial strains on companies already operating under tight margins.

While the rationale behind extending EPF coverage to foreign workers remains focused on social welfare objectives, the implementation approach has become a point of contention between government authorities and the business community. Stakeholders are seeking a phased implementation or exemption framework that could balance social protection aims with business viability concerns.