Malaysian firms are pleased with the reduced need for foreign labor, but worries remain

According to Zobir Osman, managing director of construction firm Juru Wajar Sdn Bhd, the government’s statement that it would relax employment restrictions for foreign employees has rekindled optimism that the economy will recover.

“Since the movement control order (MCO), it’s been difficult to get foreign employees,” he said, when he was met at a construction site in Kuala Lumpur. “On this site, I have seven workers, but if I could, I’d want to have 11 or 12.”

Zobir said that the shortage of foreign labor and the growing cost of raw materials contributed equally to the emergence of desperate contractors eager to underbid on projects, leaving those hesitant to take such chances without steady employment.

“Many of these government contracts give contractors a flat amount before work starts, and desperate businesses want this so they can service their bank debts… but if they do this too often, it might lead to the demise of their firm,” he warned.

Prime Minister Datuk Seri Anwar Ibrahim said on January 10 that “unprecedented” measures will be implemented to satisfy the country’s economic growth requirements in light of the impending global crisis.

This, according to him, includes the elimination of a quota that formerly required Malaysian companies to recruit at least three Malaysians before being permitted to hire one foreigner.

In addition, it was agreed to revive the Illegal Immigrant Recalibration Plan 2.0 (IIRP) program.

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The programme provides unauthorized migrants with legitimate work permits in exchange for a fee, generating nearly RM700 million in revenue for Malaysia last year.

Between November 2020 and June 2022’s conclusion, 418,528 people enrolled for the recalibration program.

Datuk Seri Mohamed Fadzill Hassan, head of the Malaysian Malay Contractors Association (PKMM), told Malay Mail, “These actions by Datuk Seri Anwar would solve a significant portion of the issue for all industry participants, whether Malay contractors, Chinese contractors, or everyone.”

Datuk Jawahar Ali Taib Khan, head of the Malaysian Muslim Restaurant Owners Association (Presma), said that his members were “extremely pleased” with the prime minister’s decision.

Tan Sri Datuk Soh Thian Lai, president of the Federation of Malaysian Manufacturers (FMM), released a statement on February 11 congratulating the government for “recognizing the essential and complementing role that foreign employees play in aiding economic recovery.”

However, employers also expressed a desire to have many longstanding demands met.

Mohamed Fadzill said that the ineligibility of United Nations High Commission For Refugees (UNHCR) cards to work un Malaysia should be altered.

“They are accompanied by their family. They must also eat, thus it is preferable to allow them to work than of allowing them to cause societal problems. It would also be a win-win situation for Malaysian businesses who are having trouble finding personnel,” he added.

Meanwhile, Jawahar Ali said that companies must be protected when foreign workers choose to return home or flee.

Malaysia’s relationships with its neighbors have lately been questioned due to its treatment of international labor.

Indonesia temporarily ceased sending its nationals to Malaysia to work in July 2022. This includes thousands of plantation workers recruited in violation of an agreement intended at enhancing the protection of domestic employees in Malaysian families.

However, this issue was resolved around one month later, in August 2022.

Arulkumar Singaraveloo, co-founder of Malaysia HR Forum, said that Malaysia must be cautious to prevent a similar scenario and ensure that the requirements of migrant workers, including adequate housing, are met when employment regulations are loosened.