If you’re looking to employ foreign workers in Malaysia, you are not alone.
Malaysia, with its flourishing economy, stands as a prime destination for companies in search of foreign talent.
However, navigating the process of hiring foreign workers in Malaysia is not always an easy feat. For most migrants, it involves specific legal regulations and logistical challenges.
Our guide is designed to simplify this process. It provides essential insights and steps to enable your company to seamlessly bring foreign talent on board.
Let’s jump straight in.
10 Steps to Employing Foreign Workers in Malaysia
Malaysia has specific regulations and guidelines in place for the recruitment of foreign workers.
Starting from January 1, 2023, the updated Malaysian Employment Act (Amended EA) requires employers to get approval from the Malaysian Director General of Labor (DGL) before hiring foreign employees.
This requirement applies to all non-Malaysian and non-permanent residents who need immigration passes to work in Malaysia.
Let’s take a more in-depth look at each of the steps in the process.
Step 1: Check If You Meet the Requirements for Hiring Foreign Workers in Malaysia
To be able to hire foreign workers in Malaysia, you must meet the following requirements:
- You have not faced legal charges related to human trafficking or forced labor
- You haven’t been found in breach of the Employment Act in the past
- You don’t have any unresolved violations concerning social security, minimum wage, or housing standards
- Your business sector qualifies for hiring migrants. The industries that are eligible for employing foreign workers include:
- Services (e.g., cooking, cleaning, accommodation, golf caddy, cargo handling, etc.)
Step 2: Conduct a Labor Market Test
Before initiating the process of hiring foreign workers in Malaysia, you must advertise the vacancy to Malaysian nationals.
This is because the Malaysian government requires you to give priority to local job seekers before bringing a foreign workforce into the country.
Without testing the market and checking the availability of local workers, you can’t complete the subsequent steps in the international hiring process.
Step 3: Apply for Approval from the Malaysian Director General of Labor (DGL)
As we mentioned before, employers must receive approval from the Director General of Labor (DGL) before hiring foreign workers in Malaysia.
To obtain this approval, you must submit the necessary forms online through the Labor Department’s website. The DGL’s approval is contingent upon several conditions mentioned in the Amended EA.
These conditions aim to ensure compliance with employment laws, social security, housing standards, minimum wages, and regulations related to preventing trafficking and forced labor.
The information you will need to provide to DGL includes:
- The vacancy that needs to be filled
- The total workforce count
- The number of foreign employees
- The company’s registration number from the Companies Commission of Malaysia
- Contact particulars and location
- The company’s current status (active or inactive)
- The industry in which your business is operating
In addition to the previously outlined information, you will need to address the following queries:
- Is there a record of employee information maintained on the company premises?
- Does the company provide employees with a copy of their employment contract?
- How many paid holidays do employees usually receive yearly?
- What is the company’s payday?
- Does the company issue payslips to its employees?
- What are the typical working hours?
- What is the annual sick leave entitlement for employees?
- Does the company make contributions towards employee social security?
- Has the company ever faced charges under the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007?
Upon successful application, the Labor Department will issue an approval letter.
Step 4: Apply for Approval from OSC
Once you get the first approval from DGL, you must obtain the quota to hire foreign workers in Malaysia. To do so, you must submit an application to the Ministry of Home Affairs, One Stop Centre (OSC).
As part of the application process, you will need to attend an interview with the competent authorities.
You will also need to submit the following documents:
- Form for requesting foreign worker quota
- Photograph or company site brochure
- Additional documents as per industry specifications
This will allow you to obtain a specific quota of foreign workers available for your sector. Upon obtaining your quota approval, you must make the levy payment within 48 hours.
The levy payment rates vary depending on your industry:
- Manufacturing, Construction, and Services – RM 1,850
- Plantation and Agriculture – RM 640
After paying the levy, you will obtain a Letter of Conditional Approval.
Step 5: Make sure Your Future Employee Meets the Requirements
To be eligible for employment in Malaysia, foreigners must meet the following requirements:
- They must be aged 18 to 45
- They must be deemed fit and healthy as approved by the medical center in their country of residence
- They must not be on the list of foreigners who are prohibited from entering Malaysia under Section 8 (3) of the Immigration Act 1959/1963
- They must hold a certified PASS result for Immigration Security Clearance (ISC) from the country of origin
- Candidates who are to work under a Visitor’s Pass for Temporary Employment (which is the most common type of Employment Pass in Malaysia) must come from specific countries. These countries include:
- Bangladesh – can work only in the plantation sector via government agreements
- Indonesia – male citizens can work only in the manufacturing sectors whereas females can work in all sectors
- Philippines – only male citizens can work in Malaysia
- India – not allowed to work in manufacturing sector
- Sri Lanka
Step 6: Obtain ISC Results
If the candidate meets the requirements outlined above, you must obtain the Immigration Security Clearance (ISC) results from their country of origin.
The ISC is the first security check that workers must undergo before the hiring process can begin. It includes screening for criminal records and involvement in illegal activities.
You can obtain an Immigration Security Clearance from an ISC center located in the applicant’s country of origin.
Step 7: Submit a Visa with Reference/Visa Dengan Rujukan (VDR) Application
Next, you must apply for a Visa with Reference (VDR) at the Immigration Department.
This visa allows individuals to enter Malaysia upon approval from the Immigration Department Headquarters.
The documents required for the application are as follows:
- VDR application form fully completed and signed
- Approval letter from Ministry of Home Affairs (quota approval)
- Proof of levy payment
- IM.12 & IM.38 forms
- Security bonds (deposits/insurance guarantee/bank guarantee)
- Copy of worker’s passport
- A passport-size photo of the worker
- Medical report from the country of origin approved by the Ministry of Health
- Worker’s Compensation Scheme (insurance)
- Health Insurance Protection Scheme Foreign Workers (SPIKPA)
The visa fee varies depending on the applicant’s citizenship. However, it typically ranges between RM 60 and RM 500.
Typically, the Immigration Department takes between 1 and 2 months to process the application.
Step 8: Your Future Employee Applies for an Entry Visa
The next step in the process of hiring foreign workers in Malaysia is to obtain an entry visa.
Your future employee must apply for an entry visa at the Malaysian Consulate or Embassy in their country of residence. The required documents include:
- Passport valid for at least six months
- Completed visa application form
- Two recent passport-size photos
- Invitation letter from employer
- Certified Company Registration documents
- Copy of medical report
- Immigration Security Clearance (ISC) results
- Any additional documents that the Embassy may request, such as flight tickets, bank statements, etc.
In most cases, the Embassy takes a few working days to process the application. Upon approval of the visa, they can enter Malaysia.
Step 9: Your Employee Undergoes a Medical Examination with FOMEMA
Within 30 days of entering Malaysia, your employee must undergo a medical examination with FOMEMA.
If your employee’s health status is not satisfactory, they can submit an appeal. However, if the appeal is rejected, your employee will be forced to return to their country of residence.
Step 10: Your Employee Obtains a Visitor’s Pass for Temporary Employment
If FOMEMA determines that your employee is medically fit to perform the job, a Visitor’s Pass for Temporary Employment will be issued. As part of the application process, you must submit the worker’s passport and insurance policies to the Immigration Department.
Upon approval of the pass, your worker will obtain a work permit sticker and ID card (i-Kad).
The Visitor’s Pass for Temporary Employment is valid for 12 months.
Employing Foreign Workers in Malaysia: Other Considerations
Under the updated Malaysian Employment Act (Amended EA), when hiring foreign workers in Malaysia, you must:
- Notify the DGL after your employee starts working
- Inform the DGL within 30 days following the conclusion of a foreign employee’s employment, whether due to termination, employment permit expiry, repatriation, deportation, or resignation.
- In addition, Malaysian employers must notify the DGL within 14 days after a foreign national’s employment ends if they resign or leave without notice.
Failure to comply with these rules could result in a fine of up to RM 100,000, imprisonment for a maximum of five years, or a combination of both.
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