In a significant move towards enhancing labor rights, the Employees Provident Fund (KWSP) of Malaysia has announced mandatory coverage for non-citizen workers. This initiative aims to ensure that all workers, regardless of nationality, have access to social protection, aligning with international standards.
Key Takeaways
- KWSP mandates coverage for over two million non-citizen workers.
- The initiative aims to promote fairness in the labor market.
- Implementation will occur in phases, starting in 2025.
- KWSP will provide further details on contribution rates and target groups soon.
Overview of the Initiative
The Chief Executive Officer of KWSP, Ahmad Zulqarnain Onn, emphasized that this initiative is designed to enhance equity in the labor market by providing social protection to all workers, irrespective of their citizenship status. Currently, non-citizen workers have the option to contribute voluntarily to KWSP, but this new policy will make it mandatory.
Expected Benefits
The new policy is expected to benefit more than two million non-citizen workers in Malaysia. This move is part of a broader strategy to ensure that all workers receive adequate social security benefits, which is crucial for their welfare and stability.
Government Support
During the recent Budget 2025 presentation, Prime Minister Datuk Seri Anwar Ibrahim announced plans to require all non-citizen workers to contribute to KWSP. This will be implemented in phases, ensuring a smooth transition for both employers and employees.
Enhancements to Existing Programs
KWSP also welcomed the government's approval to enhance the i-Saraan program. The matching incentive will increase from 15% to 20%, with a maximum of RM500 per year and a lifetime cap of RM5,000 for each individual. This improvement, effective from January 1, 2025, is expected to benefit over 330,000 existing and new participants in the i-Saraan program.
Performance of i-Saraan Program
In the first half of this year, the i-Saraan program recorded contributions totaling RM1.61 billion from 330,196 members, marking a 103% increase compared to RM789.3 million in the same period last year. Additionally, there was a 56% increase in the number of members from 211,361 in the same timeframe in 2023.
Support for Homemakers
As part of its commitment to social welfare, KWSP announced that the government will extend the matching incentive rate for the i-Suri program, which supports homemakers, to 50% of the annual contribution amount in 2025. This initiative is subject to a maximum matching incentive of RM300 per year and RM3,000 for a lifetime or until the age of 55, whichever comes first.
This comprehensive approach by KWSP not only aims to protect the rights of non-citizen workers but also reinforces the government's commitment to social equity and welfare for all citizens and residents in Malaysia.
