Malaysia: Reform of Online Processing of Foreign Workers Urged

By Michael Mackey

Aug. 6—The Malaysian Employers Federation has joined other employer groups in urging reform of the online process for the recruitment and permit renewal of foreign workers.

“The online processes should be made more transparent, efficient and cheaper,” Datuk Hj. Shamsuddin Bardan, the federation's executive director, told Bloomberg BNA.

Cost and Inefficiencies

The federation's basic grievance is that the benefits of outsourcing have been lost as cost increases they describe as “overwhelming” have been passed on to employers. Issuance of single-entry visa stickers and renewal of foreign workers' passes were the examples given Bloomberg BNA.

The federation's current understanding is that employers will eventually be made to pay for e-VDR—the electronic Visa Dengan Rujukan (Visa with Reference)—and other services for recruitment of foreign workers that have been outsourced under the Foreign Workers Centralised Management System (FWCMS), Bardan said. This is not what employers want.

“Outsourcing of services to recruit foreign workers should improve the recruitment process in terms of efficiency, transparency and timeliness in service delivery and any incidental costs should be absorbed by the authorities,” Bardan said. “The utilization of online services and technology should also result in cost reduction.”

A second problem is the frequent delay in processing and the difficulty of getting information on the status of the application.

About half a dozen MEF member companies have reported problems dealing with the outsourcing concessionaire MyEG, and one requested that MEF contact the government about the undue delay in the processing and approval of applications, Bardan told Bloomberg BNA.

Why It Matters and To Whom

While the number of companies affected is still small, the implications are big, especially as Malaysia relies more on overseas workers.

Currently, “there are about 2 million registered foreign workers in Malaysia,” Bardan said, “and it is conservatively estimated that there are about the same number of illegal foreign workers.”

One industry especially dependent on foreign labor is rubber. The Malaysian Rubber Products Manufacturers' Association has urged more transparency in the recruitment of foreign workers and the renewal of their permits. The MRPMA says it would prefer to employ local workers but attracting them has proven an impossible task, giving it no other choice but to employ foreign workers, association president Datuk Dr Ong Eng Long said, adding that the online registration and renewal of foreign workers by MyEG had proven problematic.

To contact the reporter on this story: Michael Mackey in Bangkok at correspondents@BNA.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For more information on Malaysian HR law and regulation, see the Malaysia primer.