December 2025 Monthly Roundup

Your monthly guide to regulatory and workforce developments in Malaysia

Employment Agencies Raise Concerns Over Foreign Worker Quota Applications

Employment agencies in Malaysia have raised concerns over ongoing challenges faced by employers when applying for foreign worker quotas, following the reopening of applications in October 2025. According to the Association of Employment Agencies, Malaysia (PAPA), many businesses are struggling to meet Act 446 worker accommodation requirements, secure Section 60K supporting letters, and obtain quota approvals that align with sectoral ratios set by authorities.

Key issues include limited availability of Centralised Labour Quarters (CLQ) and Temporary Labour Quarters (TLQ), restrictions on using low-cost and public housing, and lengthy approval timelines for converting existing premises into worker hostels. These challenges are particularly acute for small and medium enterprises (SMEs) in manufacturing and construction, where quota controls remain tight. PAPA has proposed interim measures, such as allowing Letters of Undertaking with security deposits, to help employers remain compliant while accommodation capacity is expanded.

At the same time, the situation highlights the importance of increasing compliant worker housing options to support both regulatory requirements and employer needs. Osadi’s recently completed apartment-style worker housing in Lunas Vision City, Kulim (3R3B) is one example of how purpose-built accommodation can help address Act 446 compliance, expand CLQ capacity, and ease pressure on quota applications. Learn more here. 

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EPF and Immigration Department Strengthen Enforcement of Mandatory Contributions for Foreign Workers

The Employees Provident Fund (EPF) and the Immigration Department of Malaysia (JIM) have entered into a strategic collaboration to strengthen enforcement of mandatory EPF contributions for foreign workers, which came into effect on 1 October 2025. The initiative enhances data sharing between both agencies, allowing for more accurate verification of work pass holders, including those under PLKS and Employment Passes.

As of November 2025, approximately 1.3 million foreign worker EPF contributions have been recorded from around 60,000 employers, reflecting early compliance across Malaysia. Authorities have reminded employers who have yet to implement the requirement that failure to do so may result in enforcement action. The collaboration aims to improve social protection for foreign workers while ensuring employers meet statutory obligations under Malaysia’s evolving workforce compliance framework.

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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