MALAYSIA: The Malaysian government has welcomed foreign workers back into major economic segments such as agriculture, mining, and plantations, in order to meet severe labour scarcity. In the latest report from HRD Asia, Home Minister Datuk Seri Saifuddin Nasution Ismail announced that the employment quota for these sectors will remain open until Dec 31, and all subsectors now qualify.
Bernama also reported that several service subsectors will reopen to foreign workers, including:
- Wholesale and retail
- Warehousing (land-based)
- Security services
- Scrap metal handling
- Restaurants
- Laundry services
- Cargo handling
- Building cleaning services
In the construction sector, foreign workers will only be allowed for government projects. Recruitment in manufacturing will be limited to new investments supported by the Malaysian Investment Development Authority (MIDA).
New approval process: A clearer path
A more efficient and stringent approval process will now be followed in the hiring and engagement of foreign workers, according to Saifuddin. Company owners and managers must now apply through their respective ministries, which will then send the applications to the Technical Committee on Foreign Worker Management.
This committee, consisting of deputy secretary-generals from various ministries, will verify applications before forwarding them to a Joint Committee, co-chaired by the Ministers of Home Affairs and Human Resources, for final approval.
The minister criticised past leniencies, calling it a “Tom, Dick, and Harry” approach that allowed too many employers to bring in foreign workers with minimal oversight.
Labour imbalance: Surpluses in services, shortages in key sectors
Based on a report from the International Labour Organisation (ILO), in May 2024, the government had suspended the foreign worker quota after an influx of more than 667,000 migrant workers in 2023, significantly exceeding the authorised target of 518,000.
A huge number of these workers went to the services and manufacturing segments, which resulted in a substantial labour surplus:
Services – 142,204 workers (required: 20,000)
Manufacturing – 197,213 workers (required: 50,000)
In contrast, other sectors faced serious shortages:
Construction – 220,230 workers (required: 301,000)
Plantations – 52,123 workers (required: 57,000)
Agriculture – 53,648 workers (required: 90,000)
The government said that this reopening is a deliberate effort to guarantee that sectors needing the necessary workforce are provided with workers while avoiding congestion in industry segments that are already jam-packed.
With the forthcoming Dec 31 deadline, businesses and policymakers will be thoroughly monitoring whether this modification can reestablish balance in Malaysia’s foreign labour landscape.