Refresher on the Guidelines on the Employment of Foreign Workers

We previously wrote about the amendments to the Employment Act 1955 (‘EA’) which came into force on 1 January 2023. Under the new section 60K (1), it explicitely states that an employer must not employ a foreign employee unless prior approval has been obtained from the Department of Labor Peninsular Malaysia.

Who is a foreign employee?

Under section 2 of the EA, the definition of a foreign worker is a non-citizen worker. Thus it is a must for all categories of foreign workers including expatriates to obtain the prior approval from the Department of Labor Peninsular Malaysia.

Is prior approval required for renewal?

It is only mandatory for employers to obtained prior approval from the Department of Labor Peninsular Malaysia when hiring new expatriates. Renewal of employment passes does not require prior approval.

Does an employer need to make multiple applications?

It is understandable that an employer may have a few different vacancies for different positions. Employers are only required to make one (1) application at a time. Approvals are given based on the employer and not on the vacancies or positions to fill.

Employers may use the same prior approval to process as many expatriates regardless of the foreign employees´ position as long as the prior approval is valid.

The validity period of the Department of Labor Peninsular Malaysia approval is six (6) months starting from the date of the email notifying the prior approval decision.

What is the processing time?

The processing time for the Department of Labor Peninsular Malaysia to issue a decision is between five (5) to seven (7) working days.

Duty to provide information

Apart from obtaining the prior approval from the Department of Labor Peninsular Malaysia, employers have a duty to submit particulars regarding the expatriate within fourteen (14) days from the date of employment to the nearest Department of Labor Peninsular Malaysia.

Employers are also required to notify the nearest Department of Labor Peninsular Malaysia within thirty (30) days from the termination of the expatriate. Termination is to include instances where the employment pass issued by the Immigration Department of Malaysia has expired.

Violations and their consequences

Failure of employers in complying with the prior approval is an offence under the EA. Upon conviction the employer shall be liable to a fine not exceeding RM100,000 or imprisonment for a term not exceeding five years or both. Furthermore, application for employment passes will not be accepted by the Immigration Department of Malaysia without the prior approval from the Department of Labor Peninsular Malaysia.