As per a new provision, workers in Malaysia are entitled to a minimum salary of RM 900—up from RM 600—but beneficiaries believe the increase is mere window dressing.

Thirty-five-year-old Ganga Chapagain recently received a work contract from his employer with a significant increase in remuneration. Once he gets back to his job in Malaysia following his 45-day vacation, he will be entitled to a monthly minimum wage of 900 Malaysian Ringgit (RM), as per the new provision.

But Chapagain, who is currently waiting to get work approval from the Department of Foreign Employment, thinks there is little reason for cheer. “The hike in the basic salary is a mere sham as there have been heavy cuts in benefits that the workers used to get earlier. We now have to bear the cost of accommodation and water and pay a monthly fee to the Malaysian government. This leaves the workers with nothing,” says Chapagain, who hails from Chitwan. 

Though the Malaysian government has made it mandatory for employers to pay a minimum salary of to RM 900—up from RM 650—workers like Chapagain feel the increase is mere window dressing. Returnee migrants think the Malaysian government’s ‘landmark decision’ to benefit some 3 million foreign workers actually includes many loopholes that can be exploited to benefit the employers, at

the expense of the workers. The workers claim that the cuts in the free amenities provided—lodging and food—along with the compulsory fee, will sponge up much of their savings.

The provisions in the new minimum-wage regulation that came into effect early January allow employers to deduct various benefits, including RM 50 a month for housing. The provision states that workers also have to pay levies ranging from RM 410-1,850 per year depending on the sector they work in. Workers in the plantation sector have to pay a yearly fee of RM 410; those in agriculture, RM 500; manufacturing, RM 1,250; and service sector, RM 1,850. Although not demanded by law, the workers earlier didn’t need to pay such levies and the companies took care of their food and boarding.

Under the guise of creating a wage baseline for workers, what the Malaysian government has done, in effect, is shift the burden of expenses from the

companies to the workers. The arguments for and against the move go thus: Rights groups in Malaysia and beyond have vehemently criticised the decision to exact levies on the workers, saying the move was an ‘immoral’ one for an economy that calls itself a free market. The Malaysian government, for its part, actually started out with different reasons for instituting the levies: It had initially enforced the levies on the employers to deter them from hiring migrant workers over locals. But when the small- and medium-sized businesses complained, the Malyasian government dumped the levies on the workers.

The Nepali government seems to be all right with the turn of events too. In line with their Malaysian counterpart’s decision, from January this year, the government here has stopped issuing permits to work contracts not meeting the minimum-wage requirements. Though government officials concede that there will be some deduction in the workers’ wages, they claim the cuts are not as serious as described by the workers.

“Earlier, the workers were compelled to work a whole day just to earn RM 450. There were no clear guidelines regarding the issue. Now, there is a clear guideline that prohibits employers from hiring workers for under 900 RM,” says Rabindra Mohan Bhattarai, director general of the Department of Foreign Employment. The government is also apparently on board with the decision because the move promises more remittance will come in. Malaysia is, after all, the largest labour destination for Nepali workers. According to the DoFE, 156,770 Nepalis left for Malaysia in 2012/13 and Nepali migrants from Malaysia remitted RM 1.9 billion (Rs 58.9 billion approximately) in 2012 alone.

Besides being perturbed by the smoke-and-mirrors game many workers see going on, they are also worried that the government is not doing enough to inform workers that the wage hike comes with added costs. While some experienced and informed migrants like Chapagain are aware of the new provisions and their shortcomings, many others still don’t know what’s in store for them.

Ashok Gurung of Dhading, a Malaysia-returnee, is preparing to return to his job in Malaysia, working as a driver for Anika Industires. Despite having worked there for five years, he doesn’t know how much of his newly pegged salary will go towards meeting his basic needs. According to his new contract, Gurung will get a monthly wage of RM 1,900, much higher than what he used to get when he went to Malaysia for the first time. Such offers, say workers, can lure the unwitting into thinking they’ll be earning more.

Furthermore, there are many returnees who are worried that some employers—and this pertains to those hiring maids, gardeners and other domestic help—might exploit the new work-milieu to benefit themselves, again at the expense of the Nepalis who work in their sector. The minimum-wage laws will not be applicable for the workers in the domestic-help sector, and the fear here is that unscrupulous employers could very well do away with providing accommodation and other amenities—under the pretext that the other industries are doing the same—and without providing a concurrent increase in wages. Uninformed first-time applicants for jobs as domestic help could thus find themselves saddled by contracts that are worse than they used to be before.

The general opinion among those who have informed themselves of the new provisions is that the wage increase will only put a dent in their savings.

 
Published on: 1 February 2014 | The Kathmandu Post