KUALA LUMPUR, March 12 (Bernama) -- Industry leaders welcomed the passing of the Employees Provident Fund (EPF) (Amendment) Bill 2025, hailing it as a balanced approach that strengthens social security while ensuring business sustainability.
The Malaysian Employers Federation (MEF) lauded the move, emphasising that it provides financial relief to businesses and enhances Malaysia’s economic competitiveness under the Malaysia Madani Economy Framework.
MEF president Datuk Dr Syed Hussain Syed Husman said the policy provides substantial financial relief for employers, ensuring business continuity while supporting foreign workers' long-term financial security.
"MEF views the EPF contribution for non-citizen employees as a balanced approach to enhancing industrial resilience, employee productivity, and economic growth over time.
“It is critical to control cost increases to ensure business sustainability and enhance Malaysia’s competitiveness in line with the goal of placing Malaysia among the top 12 most competitive countries in the world, as envisioned under the Malaysia Madani Economy Framework," he told Bernama recently.
Syed Hussain also stressed the importance of continuous stakeholder engagement before implementing future changes to EPF contribution rates, to ensure that both employer and employee interests are protected.
He added that MEF remains committed to collaborating with the government and relevant agencies to support upskilling and reskilling initiatives, particularly for local workers, to reduce dependency on foreign labour.
MEF believes that the structured savings mechanism for non-citizen employees will lead to better retention rates, workforce stability, and improved productivity in key industries such as manufacturing, plantations, construction, and services.
“With resilient businesses and a more productive workforce contributing to higher GDP (gross domestic product), this would lead to increased investments, both local and foreign direct investment (FDI), and strengthened competitiveness in the global market," he said.
Meanwhile, the Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said that, in the long run, ensuring equal social protection access for all workers could support Malaysia’s industrial resilience by improving worker retention, reducing turnover, and fostering a more engaged workforce.
He highlighted that the EPF savings accumulated under the scheme could incentivise foreign workers to return home upon completing their contracts rather than seeking to stay on legally or illegally.
“The government should also make it a strict condition that foreign workers must be in legal status at the time of withdrawal.
“This would prevent undocumented workers from accessing the funds and further reinforce the objective of ensuring that only those who comply with immigration and employment laws benefit from the scheme,” he said.
Soh stressed that the impact on business competitiveness and cost structures must be closely monitored to ensure Malaysia remains an attractive investment destination.
On March 6, the EPF (Amendment) Bill 2025 was passed with a majority of votes in favour after being debated by eight members of Parliament from both the government and opposition blocs.
It involves amendments to 11 clauses to include provisions on the liability to pay contributions and the applicable contribution rate for non-citizen workers.
The government, on Feb 3, announced that the contribution rate for foreign workers would be set at two per cent for both employees and employers, lower than the mandatory rate for Malaysian workers and permanent residents, which stands at 11 per cent for employees and 12 or 13 per cent for employers.
-- BERNAMA
