Foreign labour shortage may cost billions


The Malaysian Employers Federation (MEF) said the loss of foreign workers from the recent government crackdown on illegals could cost the economy up to billions in lost revenue.

Thousands of foreign workers were caught out without the government E-card to register illegal workers so they could continue to work when the deadline fell last week.

MEF ED Datuk Shamsuddin Bardan said a similar freeze on foreign workers in 2016 cost companies some RM24 billion in lost revenue and warned that the bill could be higher now.

“For example, when the government imposed a freeze on employment in January to July 2016, the economy suffered about RM24 billion of losses, and the construction, plantation and agriculture sectors are the ones which suffered the most at the time.

“If the shortage of foreign workers continues through the year, the losses could be even bigger,” he said.

The government made good on its promise to arrest illegal workers who have not registered under the E-card programme, with operations cracking down over the weekend.

Shamsuddin said the government needs to facilitate and expedite the process of hiring new legal foreign workers in order to not disrupt economic growth, as most key sectors of development largely depend on foreign workers for their day-to-day operations.

“Getting rid of illegal foreign workers poses a problem for the industry because we cannot fill the void quickly enough with legal workers.

“The hiring process for a new foreign worker can take up to six months as many layers and procedures need to be under taken upon approval, of which the industry does not have the luxury to accommodate.

“The ideal period should be less than one month as the industry has no other avenue to turn to in view of the regulation imposed, following the strict warning imposed on employers to refrain from hiring illegal workers to combat the shortage,” he said when contacted yesterday.

Shamsuddin said the problem is made worse because employers cannot re-employ deported illegals and every new foreign worker cost RM14,000 in fees to hire.

“Those who operate at a smaller scale might have to incur cost as an employer who requires less than 50 workers has to go through a third party agent, which in turn will increase the hiring costs significantly,” he added.

Shamsuddin said the MEF is assessing the situation before taking action to protect the interest of employers and employees.

“Many illegal workers have not turned up for work because they are hiding, which also means they are not earning any salary for food and expenses,” he said.

The E-card programme was launched in February to temporarily identify and confirm employment for illegal workers. It is also meant to serve as temporary permit for them to stay in country.

The card — valid until Feb 15, 2018 — is free and offered to workers from 15 countries, including Bangladesh, the Philippines, India, Indonesia and Vietnam.

As of June 16, only about 131,269 unregistered foreign workers have applied for the E-card — much lower than the 400,000 anticipated by the Immigration Department.