“Protect local businesses & MSMEs first”- Guan Eng Urges Govt To Exclude Foreign Workers From Minimum Wage Hikes

DAP Adviser and former Finance Minister Lim Guan Eng has warned the government that local businesses are already facing mounting economic pressures, stressing that any increase in the national minimum wage should not apply to foreign workers.

Taking to Facebook, he also called for the immediate removal of the mandatory two per cent Employees’ Provident Fund (EPF) contribution for foreign workers.

Immediate abolition of the 2% EPF contribution for foreign workers

Beyond minimum wage exclusions, Lim turned his attention to the contentious 2% EPF  contribution requirement for foreign workers. He argued that the policy places an unfair financial burden on local employers and Micro, Small and Medium Enterprises (MSMEs) without delivering any meaningful benefit to the foreign workers themselves.

“Foreign workers should not benefit from a minimum wage increase when local employers hired them based on employment contracts that had previously been mutually agreed upon. Furthermore, the 2% EPF contribution for foreign workers should be abolished immediately, as it places a burden on local employers and MSMEs without benefiting foreign workers,” he wrote on his Facebook post.

Foreign workers should be excluded from wage hikes

Lim said the current Minimum Wage Order, which sets the baseline at RM1,700, applies universally across the private sector. However, with Prime Minister Datuk Seri Anwar Ibrahim hinting at a further review and potential increase in the upcoming Budget to better match productivity with worker compensation, local traders and MSMEs have grown increasingly anxious.

Lim pointed out that local businesses are already navigating a sluggish economic climate, intensified by fierce competition, foreign price-cutting and rising compliance costs.

To safeguard local employers, he stressed that foreign workers should not benefit from wage hikes when they were originally hired based on mutually agreed-upon employment contracts.

“Protect MSMEs and prioritise local businesses first, by excluding foreign workers from benefiting through any minimum wage increase,” Lim added.

Also read: PM Anwar: Nearly 4 In 10 EPF Members On Track To Reach RM390,000 By 60, Govt Aims 6 In 10 By 2030