Friday, September 18, 2009

Nepali Government takes stand that there will be no more deduction of wages of Nepali workers for LEVY.

LEVY - rightly, it is the employer that has to pay the levy.

BUT...if the worker agrees that his/her salary can be deducted to enable the employer to recover the amount the employer paid for levy, AND the Labour Minister of Malaysia gives a special permission that the said employer can deduct from the salary of the said workers the amount the employer had paid for levy.

What is sad is that the worker is forced to sign an agreement that he allows his salary be deducted for the employer to recover the wages paid before he gets employed...or as part of his/her employment condition. This is so wrong. The worker has no choice. Say 'No' to deduction of salaries, and you do not get employed. Say 'Yes' and you get employed.

Many workers do not even realize that they do have a choice in the matter... Can workers after they are employed write to the Labour Minister and say that they do not agree to their wages being deducted for the employer to recover the levy that the employer was required to pay for hiring a foreign worker? I believe that the worker can ...and the Labour Ministry/Department should cancel that special permission.

When does a worker become a worker? After there is a valid employment agreement... and after he/she has started working. Agreement for the employer to be able to deduct the worker's salary to recover the levy paid must come from the worker only at that stage... i.e. after he/she has started working. What do you think.

Why does the Ministry of Labour (Labour Department) give these special permissions for employers to be allowed to deduct wages of workers to recover the LEVY that the employer is made to pay for employing foreign workers (rather than local workers). The giving of that special permission for the deducting of wages makes a mockery of that very government policy that requires employers of foreign workers to pay levy for each and every foreign worker that the said employer employs.

Rather than give special permission for employers to deduct worker's wages, the government should just give special waiver for the payment of levy for certain workers. That would be so much more just. Now, Malaysian government partakes in the oppression of foreign workers by allowing these additional deductions.. Some migrant workers, do not get any pay for about 6 months or more because the employer is 'deducting wages...' for levy, etc...and Malaysian government has implicitly endorsed this practice... [The law stipulates that the maximum deduction cannot be more than 50% of the, how come employers get away with not paying salary for so many months?]


24. Lawful deductions. (Employment Act 1955)

(1) No deductions shall be made by an employer from the wages of an employee otherwise than in accordance with this Act.

(2) It shall be lawful for an employer to make the following deductions:

(a) deductions to the extent of any overpayment of wages made during the immediately preceding three months from the month in which deductions are to be made, by the employer to the employee by the employer's mistake;

(b) deductions for the indemnity due to the employer by the employee under section 13(1);

(c) deductions for the recovery of advances of wages made under section 22 provided no interest is charged on the advances; and

(d) deductions authorized by any other written law.

(3) The following deductions shall only be made at the request in writing of the employee:

(a) deductions in respect of the payments to a registered trade union or co-operative thrift and loan society of any sum of money due to the trade union or society by the employee on account of entrance fees, subscriptions, instalments and interest on loans, or other dues; and

(b) deductions in respect of payments for any shares of the employer's business offered for sale by the employer and purchased by the employee.

(4) The following deductions shall not be made except at the request in writing of the employee and with the prior permission in writing of the Director General:

(a) deductions in respect of payments into any superannuation scheme, provident fund, employer's welfare scheme or insurance scheme established for the benefit of the employee;

(b) deductions in respect of repayments of advances of wages made to an employee under section 22 where interest is levied on the advances and deductions in respect of the payments of the interest so levied;

(c) deductions in respect of payments to a third party on behalf of the employee;

(d) deductions in respect of payments for the purchase by the employee of any goods of the employer's business offered for sale by the employer; and

(e) deductions in respect of the rental for accommodation and the cost of services, food and meals provided by the employer to the employee at the employee's request or under the terms of the employee's contract of service.

(5) The Director General shall not permit any deduction for payments under subsection (4)(e) unless he is satisfied that the provision of the accommodation, services, food or meals is for the benefit of the employee.

(6) Where an employee obtains foodstuff, provisions or other goods on credit from a shop the business of which is carried on by a co-operative society registered under the Co-operative Societies Act 1993, it shall be lawful for his employer, at the request in writing of the employee and with the agreement of the manager of the co-operative shop, to make deductions from the wages of the employee of an amount not exceeding the amount of the credit and to pay the amount so deducted to the manager in satisfaction of the employee's debt.

(7) Notwithstanding subsections (2), (3), (4) and (6) the Director General, on an application by an employer or a specified class or classes of employers, may permit any deduction for a specified purpose from the wages of an employee or a specified class or classes of employees subject to such conditions as he may deem fit to impose.

(8) The total of any amounts deducted under this section from the wages of an employee in respect of any one month shall not exceed fifty per centum of the wages earned by that employee in that month.

(9) The limitation in subsection (8) shall not apply to-

(a) deductions from the indemnity payable by an employer to an employee under section 13(1);

(b) deductions from the final payment of the wages of an employee for any amount due to the employer and remaining unpaid by the employee on the termination of the employee's contract of service; and

(c) deductions for the repayment of a housing loan which, subject to the prior permission in writing of the Director General, may exceed the fifty per centum limit by an additional amount of not more than twenty-five per centum of the wages earned.

[Subs. Act A1026]

Let it be made very clear that the person that is required to pay the levy is the EMPLOYER...not the worker. {As such, I do not see how the Director General of Labour can give special permission under this section to enable employers to cut workers' wages to recover the Levy that the employer of foreign workers had to pay...}.

It is good that the Nepal Government has made a strong stand that their workers are no longer going to pay levy on behalf of the employer.

The Department of Foreign Employment (DoFE) has stopped providing foreign employment permits to individuals who agree to pay a levy to the Malaysian government in their work contract.

Issuing a notice to all the associated stakeholders, the DoFE said that the decision had been effective since Sept. 15.

Mohan Krishna Sapkota, director general of the DoFE, said that as per the new decision of the Malaysian government, only the recruiting companies in Malaysia will be responsible for paying the workers' levy and it will not come out of their salary.

"Thus, no such contract agreeing to pay the levy by the workers themselves will be permitted," he said.

Malaysia, where around 400,000 Nepali migrant workers are working, made this decision last April.

According to the DoFE, it had stopped issuing approvals to such candidates after receiving the direction from the Nepal Embassy in Malaysia, which works to ensure the rights of workers and reduce their financial burden.

Foreign employment entrepreneurs said that the decision by the Malaysian government was praiseworthy as it helps reduce the financial burden of Nepali workers there.

Earlier, as per the labour contract signed between Nepal and Malaysia, Nepali workers had to pay Ringgit 100 as levy per month and the basic salary was only Ringgit 481.

Tilak Ranabhat, president of the Nepal Foreign Employment Agencies Association, said that the foreign employment agencies had been encouraged by this provision.

"Now Malaysia has also agreed to fix the basic salary at Ringgit 546," he said.
Malaysia has an estimated three million foreign workers from South Asia, including Nepal, India and Bangladesh and from neighbouring Indonesia, the Philippines and Thailand.

Kumud Khanal, managing director of Fusion International, a foreign employment consultancy, claimed that the Malaysian government had made the decision to attract more Nepali workers to the country as it started to receive less human resources from other major workforce supplying countries like Bangladesh and Indonesia.

He said that demand for workers in the furniture, food and plastics industries was increasing with the salary ranging between Ringgit 750 to 1,000. "These sectors have not been affected even during financial crisis," he said.

He said that it was the right time to send more qualified workers to Malaysia and lobby for further increasing the salary.

Meanwhile, the DoFE has also stopped issuing employment approvals for house maids and construction workers for Malaysia after the direction from the Nepal Embassy. Now onward, besides women applying for foreign employment in Malaysia, even individuals applying to work as security guards have to get their necessary documents attested by the Malaysian Embassy in Nepal. -, 18/9/2009,
Nepalis in Malaysia not liable for levy

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