KUALA LUMPUR: The Malaysian Industrial, Commercial and Service Employers Association (MICSEA) has called for a more equitable and transparent system to safeguard the welfare of foreign workers.
Its president, YK Lai, said that while worker welfare is a priority, the financial responsibility cannot fall solely on employers.
“Placing the entire cost of insurance, medical coverage, welfare, and protection schemes on employers will have a disproportionate impact on businesses, particularly small and medium enterprises (SMEs).
“Many companies are already under pressure from rising compliance costs, and an additional one-sided obligation may threaten their sustainability and future hiring,” Lai said in a statement.
Lai added that the protection of foreign workers is not just an employer issue, but a matter of national interest involving multiple stakeholders.
He noted that a fairer approach would be a shared-cost framework, where the government, employers, and employees each contribute towards protection benefits.
“This ensures equity while strengthening compliance,” he said.
MICSEA emphasised the need for transparent guidelines that define which protections are mandatory, how costs are to be allocated, and how claims will be managed.
Lai said there must be a reliable reimbursement mechanism where employers are tasked with upfront payments for payroll, statutory contributions, or insurance.
“Without such safeguards, employers may be left exposed to cash flow disruptions and unrecoverable costs,” he said.
The association has put forward several key recommendations. This includes introducing a cost-sharing mechanism that equitably distributes contributions between employers, employees and the government.
It also proposed establishing a standardised protection package covering medical, accident and repatriation needs, and creating a streamlined reimbursement process.
MICSEA also suggests providing transitional support, such as government subsidies or phased implementation, to help businesses, especially SMEs, adjust to the changes.
Additionally, it recommends using a centralised digital system to manage contributions, claims, and compliance more efficiently.
“Employers must not be forced to carry the entire cost of foreign worker protection alone. Worker welfare is vital, but the survival of businesses matters too.
“Without employers, there are no jobs. What we need is a fair, transparent, and balanced framework,” Lai added.
New Straits Times. (2025, October). Employers seek shared‑cost model for foreign worker protection. New Straits Times. Retrieved from https://www.nst.com.my/business/corporate/2025/10/1285182/employers-seek-shared-cost-model-foreign-worker-protection
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