As Malaysia faces labour shortages in some sectors, many employers turn to foreign workers to fill roles in manufacturing, construction, plantations, services and domestic work. Hiring foreign staff can be efficient — but it also brings regulatory, financial and reputational responsibilities. This guide explains the legal framework, step by step process, costs to budget, employer obligations and best practices so you can recruit safely and compliantly.
1. Quick overview: who regulates foreign employment in Malaysia
• Immigration Department of Malaysia (immigration and work permits)
• Ministry of Human Resources (labour rules, employment contracts, sector policies) Note: specific ministries or agencies may also be involved depending on the sector (e.g., plantation or construction). Always check the latest guidance on official government websites.
2. Main permit types (high level)
• Employment Pass: for skilled professionals and managerial staff. Employer usually applies via Immigration/Expatriate Services.
• Work Permit / Temporary Employment Pass or similar: for semi skilled and low skilled workers. Process and names vary by sector and worker nationality. Always confirm exact permit names, eligibility and application steps with the Immigration Department, as categories and requirements change.
3. Step by step recruitment process for employers
I. Workforce planning and job descriptions
– Define roles, hours, salary, skills, language needs and accommodation expectations.
II. Demonstrate local hiring effort (where required)
– Many sectors require employers to show local recruitment was considered before hiring foreigners.
III. Obtain approval/quotas (if required)
– Apply to the relevant government body for permission or quota to hire foreign workers.
IV. Use licensed recruitment channels
– Work with licensed local agencies and/or licensed foreign recruitment agents in the sending country.
V. Offer, contract and medical check
– Issue a clear employment contract in a language the worker understands; arrange pre departure medical screening required by Malaysia.
VI. Apply for work permit and visa
– Employer typically applies for the work permit/visa and coordinates pre departure clearances and travel documents.
VII. Arrival, registration and onboarding
– Register the worker with immigration, collect biometrics where required, and enroll in any mandated insurance/security schemes.
VIII. Ongoing compliance and renewal
– Pay levies, renew permits on time, keep records, and comply with workplace and housing standards.
4. Costs employers should budget for
• Recruitment agency fees and administrative costs
• Government application and visa fees
• Monthly or yearly foreign worker levy (varies by sector/nationality)
• Medical checks and vaccinations (pre departure and periodic)
• Mandatory insurance and medical coverage
• Accommodation/transportation, onboarding and training
• Repatriation costs (end of contract or termination) Note: amounts and levy rates change frequently — verify current rates with official agencies.
5. Employer responsibilities and compliance (high risk areas)
• Valid permits: never employ workers without valid work authorization.
• Contracts: provide clear, written employment terms in a language the worker understands.
• Wages and payroll: pay salaries on time and meet statutory deductions/benefits as applicable.
• Health and safety: provide safe work conditions and any required PPE.
• Housing & living conditions: meet minimum accommodation standards where employers provide housing.
• Medical care & insurance: maintain required medical coverage and facilitate access to care.
• Repatriation & termination: fulfill repatriation obligations at contract end or upon lawful termination.
• Recordkeeping & reporting: keep copies of permits, contracts and pay records; report changes (job, address, status) to authorities as required.
6. Common penalties for non compliance
• Fines, business blacklisting, suspension of hiring privileges
• Criminal prosecution, imprisonment, deportation of workers
• Employer liability for illegal placement, unpaid wages or poor housing
Always respond promptly to any compliance notices and seek legal advice for complex cases.
7. Best practices to reduce risk and improve retention
• Use only licensed recruitment agencies and verify credentials.
• Provide contracts in the worker’s language and ensure they understand terms before departure.
• Offer clear onboarding and cultural/language orientation.
• Maintain an accessible grievance mechanism and a local HR point of contact.
• Provide decent housing and fair working hours; invest in training and career progression to reduce turnover.
• Run periodic internal compliance audits and update policies to reflect law changes.
• Keep digital records and reminders for permit renewals and levy payments.
8. Practical documents and templates to prepare
• Job description and person specification
• Standard employment contract (bilingual)
• Pre departure checklist for the worker
• Arrival/onboarding checklist (documents to collect, registrations)
• Renewal and termination checklist (timelines and responsibilities)