What confusion about foreign workers’ EPF being cumulative was addressed?

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Confusion Regarding Cumulative EPF Contributions for Foreign Workers Addressed

Prime Minister Datuk Seri Anwar Ibrahim has clarified that the mandatory 2 per cent Employees Provident Fund (EPF) contribution for foreign workers will not be cumulative, thereby resolving confusion surrounding the policy. This decision maintains the contribution rate at a minimal level, with the government intending to keep it at 2 per cent until economic conditions show significant improvement.
Retention of 2 Per Cent Contribution Rate

The Cabinet has decided to maintain the mandatory EPF contribution for foreign workers at 2 per cent, despite initial proposals that suggested a rate of 12 per cent. This decision was made after considering appeals, and the government plans to adhere to this rate for a considerable period, awaiting improved economic circumstances.
Clarification on Non-Cumulative Contributions

A key point of confusion addressed by the Prime Minister was whether the EPF contributions from foreign workers would accumulate. Anwar Ibrahim specifically stated that the contributions would not be cumulative, reassuring stakeholders that the 2 per cent rate is minimal and will be retained unless there is a strong push for an increase.
Policy Background and Objectives

The mandatory EPF contribution for foreign workers was initially announced during the tabling of the 2025 Budget in October. This policy aligns with the government's commitment to ensuring fair treatment for all workers, irrespective of their nationality, in accordance with international standards.
Aims for Wage Equity

The initiative is also aimed at improving wage equity and preventing any disadvantage to local workers. By implementing this contribution, the government seeks to narrow the wage gap that may exist between local and foreign workers, promoting a more equitable compensation landscape.

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What confusion about foreign workers’ EPF being cumulative was addressed?

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