2 Epf Contribution Rate Further Marginalises Foreign Workers Says Activist

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Presently, foreign workers can opt to voluntarily contribute to EPF at a rate of either 11% for those aged below 60, or 5.5% for the rest.
PETALING JAYA: The reduction of EPF contribution rates for foreign workers from 12% to 2% raises serious concerns about their financial security and social protection, says a labour rights activist.

Tenaganita executive director Glorene Das said the move further marginalises foreign workers, who already face systemic discrimination despite their significant contributions to the economy.
She also said it widens the inequality gap for a workforce that is already struggling with low wages, poor working conditions and weak legal protections.
“It sends the message that despite their critical role in industries like electronics, palm oil and construction, they are still not entitled to the same security as Malaysian workers,” she said.

Das said the drastic reduction reflects a broader pattern of exclusion, where foreign workers are treated as disposable labour or a commodity, and a means to profit, rather than essential contributors to Malaysia’s growth.
Despite concerns over the long-term impact of the low 2% rate, Das said the symbolic and structural significance of foreign worker inclusion in the EPF system must remain.
“Even at a low rate, it establishes a precedent for social security coverage for foreign workers, which can be built upon in the future,” she said.
“That said, if the government is serious about ensuring financial security for foreign workers, a more meaningful contribution rate should be considered.”
Das also said that engaging with worker representatives, trade unions and migrant rights organisations would help balance worker protection and business sustainability, ensuring policies are not driven solely by corporate interests.
Tabling the 2025 budget last October, Prime Minister Anwar Ibrahim said the government planned to make EPF contributions mandatory for all foreign workers, with the plan to be implemented in phases.
Currently, foreign workers can opt to voluntarily contribute to EPF at a rate of either 11% for those aged below 60, and 5.5% for those above it. Employers contribute only RM5 under both schemes.
On Feb 3, Anwar said the government has proposed to implement a mandatory 2% EPF contribution rate for migrant workers, which was lower than the initial proposal of 12%.
He said the Cabinet had considered feedback from various chambers of commerce before finalising the decision.
Parti Sosialis Malaysia (PSM) workers bureau head M Sivaranjani questioned whether the government had utilised the tripartite system — involving employees, employers and the government — to reach consensus on the EPF contribution rate.
“Did the EPF contribution proposal go through this system or did the government make this decision solely based on the employers’ interests, without considering workers’ voices?
“Look at the minimum wage implementation in 2013. No businesses have closed down because of it. “It will be the same for this (EPF contributions) as well,” she said. - FMT

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