PETALING JAYA: The government has defended the mandatory 2% EPF contribution for foreign workers, saying this balances between ensuring social security for migrant workers and accounting for the costs borne by employers.
Finance minister Anwar Ibrahim said the 2% contribution by employers, which came into effect in October 2025, was relatively low.
Nonetheless, he said this was part of the government's efforts to expand social protection to all workers in Malaysia, in line with international practices.
"This is aimed at providing basic savings for migrant workers who also contribute to our economy, ensuring all workers in Malaysia obtain social protection regardless of nationality, and upholding the principle of fairness and inclusivity in the national retirement system," he said.
Anwar, who is also prime minister, said a total of 78,129 employers had started making the mandatory contributions for 1,754,460 foreign workers.
Of this amount, he said 67,194 employers, or 86%, were small and medium-sized enterprises (SMEs).
This entails manufacturing firms with up to 200 workers, or companies in the services sector and others with 75 employees or less.
"This development shows that the implementation of the mandatory EPF contribution has started being accepted by employers, including SMEs.
"The government welcomes proposals from all parties to improve our policies in the future. We will continue monitoring the effectiveness of this initiative while engaging the SME community to ensure assistance reaches those in need," said Anwar.
He was replying to Jimmy Puah (PH-Tebrau), who asked whether the finance ministry was reconsidering the mandatory EPF contribution for foreign workers.
In July, deputy prime minister Ahmad Zahid Hamidi claimed the government had agreed to review the EPF contribution to ease concerns among businesses.