Government's Latest Policy Improves Foreign Workers' Welfare

Malaysian Employer Federation say that the government's newest policy of abolishing the services of outsourcing companies in hiring and managing foreign workers will ensure better welfare for them.

Outsourcing companies provide foreign workers to their clients' companies on a temporary basis. The workers are not the clients' employees but technically employees of the labour contractors.

Datuk Shamsuddin Bardan, executive director of Malaysian Employers Federation (MEF) said cancelling the labour contractors' services would mean better care of foreign workers, as they usually received low payment from these middlemen.

Datuk Shamsuddin Bardan . Source: MStar

He said that the outsourcing companies had to maintain their margin. Even though their clients can pay them higher for the foreign workers supplied, the contractors provide minimum payment for their foreign workers.

The outsourcing firms' services will be terminated effective 31 March 2019. These companies supply and manage foreign workers in manufacturing, construction, services, and agriculture sectors. This task will soon be taken over by the Human Resources Ministry, which means there will be no more need for middlemen or labour brokers.

The outsourcing system involved over 26,000 foreign workers.

Foreign workers with work permits under outsourcing employers who are not included in the process of changing of employers will be dismissed through the system. If they remain in Malaysia after 31 March 2019, their status will be changed to illegal foreign workers.

Shamsuddin said that the Home Ministry has also advised outsourcing firms to comply with the directive to avoid prosecution under the Immigration Act 1959/1963 and the Private Employment Agency Act (Amended) 2017.

In October 2018, Home Minister Tan Sri Muhyiddin Yassin also said the outsourcing firms were given time to transfer their employees to selected employers.

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