Managing cross-border labour: The intricacies of hiring foreign workers

Overbearing quotas and sudden policy shifts continue hampering sectors reliant on foreign labour 

by HIDAYATH HISHAM & ZAHIN ZAILANI 

HIRING foreign workers in Malaysia involves navigating a complex process with many governmental and private sector stakeholders playing crucial roles. 

Strict regulations have been enacted to balance business needs for foreign labour with protecting local jobs, health and security. 

The Immigration Department of Malaysia oversees the country’s borders and the entry of all foreign nationals. 

It issues visas ensuring legal entry and employment, enforcing regulations like medical screening by Fomema Sdn Bhd. 

Industry groups like the Employment Agencies Association Malaysia (Papa) facilitate hiring, advocating for employer interests while aiming to protect worker rights. Other players also assist foreign workers. 

Overall, layers of vetting, quotas, permits and coordination between key agencies characterise the foreign worker recruitment system. 

While robust, employers still face difficulties getting adequate workers promptly due to restrictive policies. 

Workers also remain vulnerable to exploitation, despite safeguards put in place. 

Immigration Department 

The main agency involved is the Immigration Department which oversees the process for foreign workers’ permits and visa clearance. 

This department is in charge of all immigration into the country and is under the purview of the Home Affairs Ministry. 

It provides services to Malaysian citizens, permanent residents and foreign visitors such as migrant workers by issuing passports and travel documents, as well as visa passes. 

It also manages the movement of people at legal and authorised entry and exit points into Malaysia. 

The department serves to protect and enforce the Immigration Act 1959/63, Immigration Regulations 1963, Passport Act 1966, Anti-Trafficking in Persons, and Anti-Smug- gling of Migrants Act 2007 (Amendment 2010). 

The department also keeps the borders safe from drugs, weapons or even traffickers, as well as other irregular foreign workers with ulterior motives. 

The process of foreign workers being able to enter and work in the country is quite a long and arduous process, including two phases before and after arrival. 

Phase 1 involves gathering relevant documents such as obtaining the Visa with Reference or the Visitor’s Pass (Temporary Employment), which will only be issued to the foreign worker after their health is approved or certified by Fomema. 

Fomema 

Fomema is an agency appointed by the government to work with the Health Ministry and the Immigration Department to monitor and supervise the mandatory health screening of all legal foreign workers in Peninsular Malaysia as well as Labuan. 

According to its official website, the main objectives of the programme are to ensure the health security of Malaysian citizens is well guarded by curbing the risk of spreading of infectious diseases from foreign workers and by reducing the potential burden on public health facilities in providing treatment to foreign workers with uncontrolled chronic diseases. 

For Fomema, the three medical tests are Filariasis, Hepatitis C and Methamphetamine, which all need to be done annually starting from December 2023. 

The tests cost RM207 for men and RM217 for women, and there is an RM27 cancellation/refund fee. 

All these tests are done because these diseases are more prevalent among foreign workers, and as for Methamphetamine, it is to decrease drug abuse in Malaysia for both the local and foreign population. 

For new arrivals, the employer must complete the registration within seven days of the arrival date, and the employer must renew the registration three months before the work permit’s expiration date.
Fomema helps manage and protect the health of locals as well as foreign workers 
from dangerous drugs and illnesses. 

The employer must register all their foreign workers for mandatory health screening to curb the risk of spreading infectious diseases from foreign workers to Malaysians (pic: TMR)

Employment Agencies Association Malaysia

The process of hiring foreign workers in Malaysia involves multiple stakeholders, as explained by Employment Agencies Association Malaysia (Papa) president Datuk Foo Yong Hooi. 

“The government has frozen the application for migrant workers,” Foo told The Malaysian Reserve (TMR), indicating the government’s key role in setting policies, quotas and approvals regarding foreign worker employment. 

On March 1 last year, the quota application and approval for foreign workers including through the Foreign Worker Employment Relaxation Plan was suspended for all sectors. 

On Jan 16 this year, Home Minister Datuk Seri Saifuddin Nasution Ismail said there have been no discussions to lift this freeze. 

Foo said the government sets specific local-to-foreign worker ratios that employers must comply with to bring in foreign labour. 

“If foreign workers are brought in through licensed employment agencies, I believe that 95% of workers’ welfare will be protected. 

“If they receive complaints, the agencies will interfere with the employers,” he added on protection for workers hired via agencies. This underscores the agencies’ duty to ensure ethical conduct and protect worker rights. 

Foo said recently, employers who did not apply for a new quota after the freeze lift in 2022 have faced issues with getting replacements as their workers will return to their countries when their contracts end. 

Now with the March 2023 quota freeze, Foo said companies cannot apply for a new quota. 

Foo said the current regulations are too restrictive for business needs. 

“When companies receive new orders, they would not have enough manpower,” he said, adding that this broadly demonstrates that all major industries reliant on foreign labour face shortages, hampering their expansion plans. 

He noted that industry groups like Papa submit policy recommendations, but have limited visibility on how much input is accepted by the government. 

Despite various agencies facilitating and regulating the process, the layers of bureaucracy impose delays for employer needs, Foo says

Malaysian National Association Employment Agencies

Formed in 1999, the Malaysian National Association of Employment Agencies (Pikap) is a group of licensed employment agencies from the Human Resource Ministry. 

Their main goal is to promote and safeguard members in the employment industry. Pikap actively engages with Malaysian and foreign authorities to ensure local and foreign employment is a benefit to members and the public as a whole. 

Moreover, they work very closely with foreign source country employment associations to promote job opportunities in Malaysia. 

These organisations and departments serve a big role in bringing in and hiring foreign workers, as well as protecting them from the locals as well as themselves, if necessary. 

Some lesser-known organisations also assist in helping foreign workers such as Program Kebajikan & Khidmat Imigran (Peka) who help uplift foreign worker issues. 

According to its Facebook page, Peka helps immigrant workers wherever they can, including domestic violence. 

Employing foreign workers in Malaysia involves navigating an intricate system with strict controls in place — from health checks and entry permits to jobs reserved for locals. Despite various agencies facilitating and regulating the process, the layers of bureaucracy impose delays for employer needs. 

While robust measures aim to uphold border security, public health interests and ethical practices, overbearing quotas and sudden policy shifts continue hampering sectors reliant on foreign labour. Workers also face personal exploitation risks. Achieving an optimum balance remains challenging. 

Ultimately, hiring foreign employees touches upon Malaysia’s broader goals for economic growth and global market competitiveness. 

The government’s strategy in forecasting models that are nimble to business realities across different industries is vital. 

Similarly, private agencies need to bolster protection for vulnerable migrants. A cooperative, streamlined framework that meets crucial targets but also upholds rights is imperative. 

To conclude, managing cross-border labour recruitment involves reconciling the priorities of multiple players in Malaysia’s public administration and commercial ecosystem. 

How the next phase of evolution in foreign worker policies pans out remains to be seen. Achieving outcomes benefitting all sides is an ongoing process requiring consultation and review from those on the ground. 


  • This article first appeared in The Malaysian Reserve weekly print edition