PETALING JAYA, Dec 6 — The National Higher Education Fund Corporation (PTPTN) cannot make any deduction from salaries of its borrowers without consent from them or their employers, said Malaysian Trades Union Congress president Abdul Halim Mansor.
He said provisions under the Employment Act 1955 stipulate that any form of deductions must have prior approval of the workers themselves.
“There must also be a (written) agreement which the worker signed with the loaner (PTPTN) to authorise them or a bank acting for the loaner to make the deductions,” Abdul Halim told Malay Mail, adding the agreement must also have the consent of the employer.
He said the Act also ensured that any deductions made for whatever purpose cannot exceed more than 50 per cent of the worker’s basic salary.
Abdul Halim dismissed any attempts to emulate the Inland Revenue Board’s (IRB) monthly tax deduction system, stating the IRB has its own legislation which enables them to do so.
“In their case, it is a necessity since citizens have to pay income tax. But for PTPTN, it has no analogous legislation, and therefore must respect the Act in this instance.
“Assuming PTPTN goes ahead with this, I can foresee several issues cropping up, such as the employers facing problems when making the deductions since salary payments are computerised nowadays,” he said.
In addition to the paperwork and administrative headaches an employer will face, Abdul Halim said PTPTN itself must provide a deduction schedule to them which clearly states the commencement date and ending for each worker’s deduction.
“For them to announce it now before any agreement has been made between all the parties involved is rather premature. I am unsure what PTPTN would be able to do if it comes across any worker or employer who simply disagrees to the deductions,” he said.
PTPTN chairman Wan Saiful Wan Jan had said federal student loan takers earning above RM2,000 a month no longer have to pay their debt directly as it will be taken from their salaries.
Likening it to the IRB’s system, he explained the tiered wage garnishment scheme will start in January next year at 2 per cent for those earning between RM2,001 and RM2,499. In turn, this is extended to 15 per cent for those with monthly salaries of RM8,000 or more.