Press Digest - Firms may cut bonuses over levy

PETALING JAYA: The government's move requiring employers to pay for the levy on their foreign workers may force labour-intensive sectors to rethink bonus payouts for the year just ended, and salary increments this year.
According to a report in Sin Chew Daily today, SME Association of Malaysia president Datuk Michael Kang said in view of the immediate impact of the Employer Mandatory Commitment (EMC), which shifts the responsibility for the levy from workers to employers, and their lack of confidence in the government introducing business-friendly policies this year, employers may, for a start, slash bonus payouts to mitigate the sudden rise in operating costs.
"Some employers may (even reconsider) paying bonus to their workers. We don't know what the government has for us for the rest of the year," he said.
Kang said should employers decide to slash or do away with bonuses, the biggest losers will be the locals as foreign workers are usually given performance-based incentives in special cases instead of bonus payments.
"The new measure is akin to robbing locals to pay for their foreign colleagues. It is equivalent to a pay hike for foreign workers. The move will definitely affect the welfare of local workers."
However, Associated Chinese Chamber of Commerce and Industry of Malaysia secretary-general Datuk Low Kian Chuan begged to differ, saying bonus is based on
a company's profit margin and an employee's performance for the year in review.
He is more worried that some employers may opt to lay off workers to stay afloat.
Low said employers will be more calculative in determining pay increments for the current year.
"I believe pay cuts will not happen to ordinary employees. However, some senior management staff may not get an increment, or worse, have their pay cut."