Cost of hiring a foreign worker inflates in Malaysia

PETALING JAYA, Malaysia (Sin Chew Daily/ANN) - The Malaysian Employers Federation, Federation of Malaysian Manufacturers and SME Association of Malaysia urge the government to look into reducing red tape on the recruitment of foreign workers. 

Business owners urge the government to cut red tape on the hiring of foreign workers in a bid to reduce costs. The latest policy on the recruitment of foreign workers is still pending. 

Malaysian Employers Federation (MEF) executive director Shamuddin Bardan said employers are worried as the government has not released the latest policy on the recruitment of foreign workers.

He said prior to releasing the new policy, the government should continue to use existing policy on foreign workers.

According to Shamsuddin, the cost of hiring a foreign labour without middlemen range between RM1,500 (US$365.85) to RM5,000 (US$1,219.51). However, going through an agent will inflate the cost several folds from RM13,000 (US$3,170.73) to RM14,000. (US$3,414.63)

Federation of Malaysian Manufacturers (FMM) president Soh Thian Lai said the previous government allowed too many agents to bring in foreign workers. FMM hoped that the government can set up a one-stop centre under the Human Resources Ministry to handle applications of foreign workers. 

Soh, in a phone interview, said FMM will be discussing with the authorities on issues caused by the ban on intake of foreign workers from Bangladesh and Nepal.

“We understand that Malaysia is having a bilateral agreement on the government to government with these two countries."

“We hope the bilateral agreement would discard problems caused by red tape and reduce the cost for employers to hire foreign workers. 

“Many industries are affected by a shortage of workers. We hope the government would resolve the problem as soon as possible,’’ he said.

Soh is of the view that small and medium industries and export would gain if these employers are able to hire foreign workers to ease the shortage of manpower. 

Michael Kang, the National President of the SME Association of Malaysia said many SMEs were forced to relocate their plants to overseas due to a shortage of labour. 

He said the government had yet to draft new policy and applications of foreign workers (by employers) were put on hold. 

He criticised the government of not offering a policy for an interim period which resulted in factors to cut down production due to shortage of labour. The economy of the entire market is affected. 

“The economy of the entire market is down, business volume has dipped. Some operators relocate their operations to overseas. Many Malaysia factories produce furniture in Vietnam now,’’ he said. 

Many SMEs were afraid to take orders due to the shortage of manpower, he said. 

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