Only 453 Private Employment Agencies left in Malaysia

The Labour Department states that there are only 453 licensed private employment agencies left in Malaysia, The Star reports. According to Labour Department of Peninsular Malaysia’s labour services director Mustaffa Kamal Bawaihii, 1,000 issues were licensed to private employment agencies prior to 2017 but after the Private Employment Agencies Act amendments, the number decreased to 453.

He said “The 453 agencies are those which really want to conduct the business. This is because it requires a big capital and deposit, compared to before.” The amendments, passed in August 2017, would further increase the government’s ability to regulate recruitment activities of private employment agencies.

The amendments also include the classification of licences under three categories:

• Licence A: for the recruitment of local job seekers within Malaysia.

• Licence B: For local recruitment, deployment of Malaysians to work abroad, as well as to bring in foreign domestic workers

• Licence C: for recruitment and deployment of Malaysians to work abroad, to bring in domestic and migrant workers.

Mustaffa added that the 453 licences were mostly for categories B and C.

The president of the Association of Employment Agencies Malaysia (PAPA), Foo Yong Hooi says the public should engage with licensed agencies for hiring foreign domestic or migrant workers. “These licensed agencies will strictly adhere to the law and regulations as they have deposits placed with the government. Any infringement may cause their cash deposits to be forfeited,” he said.

More about Private Employment Agencies (Amendment) Act 2017

The Private Employment Agencies (Amendment) Act 2017, enforced since 2 February 2018, is aimed to protect local workers who gain employment abroad through private employment agencies, would be enforced by the Ministry of Human Resource through the Labour Department.

Among the amendments are private employment agencies must have the words “Agensi Pekerjaan” preceding the name of their company and private employment agencies operating in Malaysia must have a license before they can carry out any recruiting activity in Malaysia. The penalties for noncompliance has been increased to a fine not exceeding RM200,000.00 or imprisonment for a term not exceeding 3 years or both.

Based on the amendments, a private employment agency must be a company incorporated under the Companies Act 2016, with a minimum paid up capital (depending on the category of license), and whereby 51% of the total shares in the company must be held by Malaysian citizens. Previously, private employment agencies can be run by an individual or in the form of a partnership.

There was a transition period of six months, from 1 February to 30 July 2018 which allowed the 1,202 private employment agencies nationwide to continue recruiting and conducting job placements until the expiry of their licences without being subjected to the revised guarantee bond.

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