'1mil job cuts if employers’ EPF contribution raised'
Published on: Thursday, May 04, 2023
By: FMT
The Malay Chamber of Commerce Malaysia has shot down the proposal to increase the employers’ EPF contribution, saying they are still struggling with rising operating costs.
PETALING JAYA: About one million workers from micro, small and medium-sized enterprises (MSMEs) risk losing their jobs if the government proceeds with increasing the employers’ EPF contribution.
Malay Chamber of Commerce Malaysia acting president Norsyahrin Hamidon said the proposal could increase the enterprises’ operating costs, causing their owners to lay off at least one worker each.
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According to Utusan Malaysia, Norsyahrin said the business owners were already struggling to restructure their businesses following the pandemic while adapting to current economic pressures.
“Salary and rent are the two main concerns for employers, so if they can’t afford to pay the increased contribution, many people will face (job cuts),” he said.
Norsyharin said the government should consider measures to revive the economy instead to create a domino effect that would benefit businesses.
Earlier this week, Prime Minister Anwar Ibrahim said the Cabinet will discuss a proposal to increase the employers’ EPF contribution.
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This comes after the Uni Malaysia Labour Centre (Uni-MLC) reportedly urged the government to increase the employers’ contribution to 20% from the current 13% for those earning RM4,000 and below.
Meanwhile, Mydin hypermarket managing director Ameer Ali Mydin suggested that the government raise the minimum wage for workers by another RM150 instead of increasing the employers’ EPF contributions.
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“The proposal to increase EPF contributions is beneficial when the worker retires, but the problem with workers today is they don’t have money to spend because of the rising costs of living,” he said.
“Increasing their salaries would ensure that they have more money to spend and can foot their living costs,” he said. This would also boost the economy due to the multiplier effect with people having more spending power.
Ameer also said the government could consider implementing the proposal after the economy has recovered. However, he said, the increase in EPF contribution should be gradual so that the employers can adjust accordingly.
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