What Malaysian Employers Need to Do to Hire Expatriates in 2021

Many Malaysians were left jobless after COVID-19 took hold of the world. Thus, the Government came up with initiatives to create job opportunities for the people. One of them is a new job advertisement requirement. Introduced by the Department of Labour, this new requirement affects companies in Malaysia that wish to hire expatriates. 

Here are some key points of the new requirements:

i. What does the new requirements mean?

Employers who plan to hire expatriates must advertise job vacancies for at least 30 days on the MYFutureJobs Portal under Human Resources Ministry. 

Employers also need to conduct interviews as an effort to hire local workers to meet the pre-condition for employing expatriates. 

ii. Who is included in the new requirements?

Employers in all job sectors in Malaysia that plan to hire expatriates can do so through employment pass only. 

Employers that intend to hire expatriates via a Professional Visit Pass or Resident Pass-Talent are not required to follow the New Requirements. 

There are three expatriate categories that the Ministry of Home Affairs regulates:

• Category I (Skilled) | Monthly Income: RM10,000 and above | Contract Term: 2-5 years

• Category II (Skilled) | Monthly Income: RM5,000 - RM9,999 | Contract Term: 2 years maximum

• Category III (Semi-skilled / Knowledge worker) | RM3,000 - RM4,999 | Contract Term: 1 year maximum

iii. When did it start?

The new requirement came into effect on January 1, 2021.

In order to hire expatriates, employers must post the job ad on MYFutureJobs Portal for 30 days minimum.

iv. What is the process to meet the new requirements?

1. Register open positions on the MyFutureJobs portal for at least 30 days and ensure all details related to the positions are given.

2. Employers must conduct interviews as an effort to hire local talent within 30 days from the advertisement date of the position and submit the interview report through the Hiring Outcome Report.

3. Employers need to update the company's labour data in the ePPAx System for compliance monitoring on Employment Standards on the 8th day after the job has been posted and activated on MYFutureJobs.

4. The expatriates' applications will be shown to the Expatriates Placement Committee (JPPD). The committee will examine the applications by considering the employer's efforts in sourcing local workers. 

v. Who are exempted from the new requirements?

1. Employers who plan to hire expatriates with major positions in an organisation, for example, Chief Executive Officer, Chief Information Officer, and expatriates who earn a monthly basic income of RM15,000 and above.

2. The representative office OR regional office of overseas organisations OR companies in the manufacturing and services sectors founded in Malaysia to carry out activities for the company OR Organisation headquarters. 

3. Shareholders or investors directly involved in the organisation's operations. In this context, investors refer to individuals who invest funds in Malaysia to achieve an investment return. Shareholders need to hold at least 30% equity shares and be selected as the company's director or hold other major positions. 

4. Companies that receive expatriate workers from a parent company for training or knowledge/experience-sharing purposes between companies and meet their workforce needs.

5. Organisations subject to the International Organization Act (Privileges and Immunities) (Act 485) that may appoint Foreign Recruited Staff from foreign nationals.

6. Sports organisations or club in Malaysia for their athletes/professionals recruitment. 

vi. What happens to employment pass renewals?

Employers do not need to re-advertise vacancies or conduct job interviews to renew employment passes for approved jobs. Employers can liaise directly with the Immigration Department / Approval Agency to renew existing employment passes.

Employers should consider the enforcement of the new requirements as part of their recruitment process. Priority will be given to local workers, and there will be additional lead-time that will be incurred before you may hire an expatriate.

Helpful links
MyFutureJobs
Expatriate Services Edition, Immigration Department of Malaysia 
ePPAx System
SOCSO Guide for Hiring Expatriates

Source: SOCSO, Nagashima Ohno & Tsunematsu

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