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InsightMonthly Roundup

August 2025 Monthly Roundup

August 22, 20254 min read

Your monthly guide to regulatory and workforce developments in Malaysia

Foreign Worker Quotas Opened Until Dec 31 for Key Sectors

The Malaysian government has reopened foreign worker quota applications until 31 December 2025 across key sectors to meet industry demands.

Sectors eligible:

  • Agriculture, plantation, mining: All subsectors
  • Services: Wholesale and retail, warehousing, security, scrap materials, restaurants, laundry, cargo, and building cleaning
  • Construction: Only for government-linked projects
  • Manufacturing: Limited to new investments approved by MIDA

Notably, only sectoral agencies are now allowed to submit applications—employers and private agents no longer have direct access to quota submissions. This is intended to strengthen governance and reduce abuse in the application process.

All applications will be reviewed by the Foreign Workers Technical Committee and finalised at the Home–Human Resources Joint Committee level.

Important context:
Malaysia’s current foreign worker ceiling remains at 15% until the end of 2025. A stricter limit of 10% will be introduced in 2026 under the 13th Malaysia Plan (13MP).

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Immigration Department issues stern warning to employers

The Immigration Department has reiterated that hiring undocumented foreign workers is a serious offence under Malaysian law. Employers caught doing so risk fines ranging from RM10,000 to RM50,000, jail terms of up to 12 months, or both.

This warning comes as part of ongoing nationwide operations to address illegal migration, especially in key sectors like manufacturing, plantations, agriculture, hospitality, and domestic work. The situation is further complicated in East Malaysia, where porous borders and informal cross-state hiring for domestic care roles remain a challenge.

Employers are urged to verify worker documentation and avoid informal hiring practices to prevent legal, financial, and reputational risks.

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RM8,000 per worker: Immigration crackdown on illegal agents and blacklisted employers

Over 2,300 employers have been caught hiring undocumented foreign workers between 2023 and 2025, with total fines exceeding RM43 million. Many of these employers relied on illegal agents, paying as much as RM8,000 per worker to bypass legal recruitment channels.

According to Immigration Department DG Datuk Zakaria Shaaban, some agents forged documents or misused programs like the Labour Recalibration Programme to smuggle workers into the system. These syndicates also operated illegal “renewal” services, charging RM4,000–RM6,000 annually for fake permit renewals.

Cases of human trafficking and worker abuse were also reported, including one where workers were confined in a toilet for weeks before placement.

Employers caught engaging with such agents face prosecution under both the Immigration Act and ATIPSOM, with additional penalties if exploitation is involved.

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Foreign worker permit renewals: MyEG out, Bestinet’s FWCMS now the only platform

The Home Ministry has confirmed that Zetrix AI (formerly MyEG) is no longer involved in the renewal of foreign worker permits. The government has officially transitioned to Bestinet Sdn Bhd’s Foreign Workers Centralised Management System (FWCMS) under an exclusive six-year contract.

This move eliminates alternative channels like MyEG and centralizes all ePASS applications through FWCMS starting February 2025.

The ministry clarified that MyEG’s previous concession was not extended, and proper procedures were followed to end the partnership. As of May, RM86.3 million in claims had been submitted by Bestinet, with RM12.7 million already paid for services delivered between November 2024 and February 2025.

The shift underscores Malaysia’s tightening of foreign worker management processes and reaffirms the government’s move toward greater oversight and centralisation.

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Osadi: Your Partner in Workforce Management

At Osadi, we are committed to supporting our clients through these regulatory changes. We’re here to ensure your workforce remains efficient, compliant, and future-ready. Stay tuned for more updates, and don’t hesitate to reach out to our team for personalized assistance as we navigate 2025 together.

Prepared by Ken Wooi
Business Development Team
bdteam@osadi.com.my