Imposing a cap is not practical, say employment agencies

PETALING JAYA: Employment agencies and groups are against imposing a cap on hiring Indonesian domestic workers.

As Malaysia does not depend on a single country to supply domestic workers, the Vice President of the Association of Malaysian Employment Agencies, Suresh Tan, said it should be left to market forces to determine the cost.

“If you put a cap, they will stick to it (the maximum price) regardless of the demand,” he said.

“When you let market forces decide the price, other labour-supplying countries can lower their recruitment costs as well,” he said.

Currently, the recruitment fee for hiring a domestic worker from Indonesia is between RM15,000 and RM20,000, with additional costs incurred due to Covid-19 restrictions.

Tan said it cost an agency RM10,000 to obtain a domestic worker’s biographical data, and the fee could vary depending on screening expenses and other expenses.

“Then there is also an immigration tax of around RM1,136, medical checks by Foreign Worker Medical Examinations (Fomema), insurance, social security fees (Socso) and now quarantine requirements Covid-19.

Agreeing with this issue, the president of the National Human Resource Association of Malaysia (Pusma), Zarina Ismail, said Malaysian agencies rely on costs determined by their Indonesian counterparts.

“However, we hope we can reduce the cost. Previously, we could get a domestic worker for around RM17,500 to RM18,000.

“If possible, we want to go below RM20,000 as we need to understand the current economic situation for Malaysian employers,” she said.

The employment agency’s chief executive, Justina Neo, said a cap on hiring fees would only create additional problems, including “gaps” around implementation.

She does not think it is possible to reduce hiring fees unless Indonesia reduces the fees for acquiring biographical data for domestic workers.

However, Malaysian Maid Employers Association (Mama) Chairman Engku Ahmad Fauzi Engku Muhsein said it was justifiable to drop the price below RM10,000.

“The cost of hiring an Indonesian housekeeper should be less than RM10,000. What drove up the costs were the layers of process,” he said.

Agencies in Malaysia have to liaise with their counterparts in Indonesia to search for candidates in villages, he said, which comes at an additional cost. They also have to provide training in addition to other necessities for domestic workers, leading to even more expense, he added.

To combat the additional costs, he suggests that employers have the freedom to recruit their own domestic workers.

Commenting on the minimum starting wage, Engku Ahmad said RM1,200 is acceptable as long as the quality of work is “at the highest”.

“Employers expect high quality for such a salary. If the housekeeper can deliver it, then RM1,200 should be enough, although it’s actually quite high,” he said.

Tan and Zarina echoed the same sentiments, saying the minimum wage of RM1,200 is justifiable if the domestic worker is able to provide work equivalent to the wage.

“There are employers who are willing to pay even RM1,500 as long as their work is up to scratch,” Tan said.

Neo said the starting salary was reasonable, but warned he might not be able to attract better-qualified workers as they would opt for a country that offers a higher salary.

“They (domestic workers) would prefer to go to neighboring countries like Singapore where they could earn 550 Singapore dollars (RM1,715). The Philippines sets a minimum wage of US$400 (RM1,675) for their domestic workers,” Neo said.

Last year, the Indonesian government proposed that Putrajaya set a minimum wage of RM1,500.

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