KUALA LUMPUR (May 13): The multi-tiered levy mechanism to be implemented by year end or early 2025 should be done in tandem with the single end-to-end online foreign worker application and approval process, said the Federation of Malaysian Manufacturers (FMM).

This will strengthen the entire recruitment process in the country, the FMM said. The move is also integral to more technology adoption.

“A single ministry should manage foreign workers to ensure a holistic, fair and transparent administration without unnecessary human intervention,” the FMM said, adding that the tiered levy system should be transparent and easy to implement with clarity on cost and a gradual rise in rates to minimise its impact on businesses.

Incentives should also be provided to reduce the use of foreign workers, the FMM said.

“The multi-tiered levy mechanism should be carried out for all the economic sectors,” the statement said.

The FMM said the levy rate should be based on the number of foreign workers employed and the rise in levy should be gradual, planned and made known a year ahead.

The federation also said the requirement of an 80:20 ratio of local to foreign workers, which has been put on hold until December 2024, needs to be reviewed since the mechanism guarantees approvals as long as the employer pays.

The FMM said a certain percentage of the levy collected should be ploughed back into the industry to finance training and upskill local workers via a national apprenticeship fund and to automate business processes via a national automation fund to reduce dependence on low-skilled foreign workers.