Companies in Malaysia should note the new requirements for hiring foreign employees. Employers must now seek prior approval from the country’s Director General of Labor (DGL).
Malaysia’s government implemented the amendments to the Employment Act in January 2023. One of the important changes to the Employment Act is the new requirements for hiring foreign employees who require immigration passes in Malaysia.
The New Requirements
Prior approval from Malaysia’s DGL
Employers in Malaysia must now seek prior approval from the country’s DGL if they want to employ foreign employees. This requirement applies to all non-Malaysians and non-permanent residents who require an employment permit to work in the country.
Approval from the DGL is subject to the following conditions:
- The employer has not been convicted of human trafficking or forced labor crimes
- The employer has no outstanding breaches under the Employment Act
- The employer has no outstanding breaches in relation to social security, minimum wages, or accommodation standards
The applications are done online via the official website of Malaysia’s Labor Department.
The employer will need to complete the following details related to their company:
- The position the foreign employee is applying for
- The total number of employees
- The total number of foreign employees
- The company’s registration number under the Companies Commission of Malaysia
- Contact details and address
- Status of the company (active/inactive)
- Business sector
In addition to the details previously discussed, employers will need to answer the following types of questions:
- Does the company keep a register of employee details on the premises?
- Does the company provide a copy of the work contract to the employee?
- Does the company provide a payslip to the employee?
- What are the normal working hours?
- What is the payroll date?
- What is the minimum number of paid holidays that employees receive per year?
- What is the minimum amount of sick leave that employees receive per year?
- Has the company ever been convicted under the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007?
- Does the company pay for employee social security?
The employer must provide all of these particulars within 14 days from the date of employment.
Notice Requirement
Employers must notify the DGL within 30 days after the end of the foreign employee’s employment either due to termination, expiration of employment permit, repatriation or deportation from Malaysia, or termination.
Further, Malaysian employers must notify the DGL within 14 days after the end of the foreign national’s employment if they submit their resignation or leave without notice.
Noncompliance Penalties
Failure to comply with the new requirements can lead to a fine of up to 100,000 ringgit (US$22,615), imprisonment of up to five years, or both.