Foreign Workers’ Rights in Malaysia: What Employers Must Comply With

Foreign workers play a vital role in Malaysia’s economic growth, especially in sectors like construction, manufacturing, plantations, services, and agriculture.

Many employers rely on foreign workers to fill essential jobs that are often difficult to recruit for locally.

However, hiring foreign labor comes with responsibilities. Employers must follow Malaysian labor laws and ensure fair treatment of their workers.

This article provides a simple, practical guide for Malaysian employers to understand the legal and ethical obligations when hiring foreign workers.

Why Foreign Workers Rights Matter?

In Malaysia, foreign workers are non-citizens employed under valid work permits.

Most of them come from countries like Indonesia, Bangladesh, Nepal, India, and the Philippines.

These workers usually take up low to medium-skilled roles.

Understanding their rights is important for several reasons:

Foreign workers are protected under Malaysian laws, just like local employees.
Failure to comply with labor laws can result in legal penalties and reputational harm.
Fair and ethical treatment leads to a more stable, productive workforce.

Employers who respect the rights of foreign workers build a stronger company culture and avoid unnecessary HR risks.

Key Laws and Guidelines You Must Follow

When hiring foreign workers in Malaysia, employers must comply with several important legal frameworks:

Employment Act 1955

This act covers key areas such as working hours, minimum wage, overtime, rest days, annual and sick leave, and termination.

It applies to most manual workers and employees earning RM2,000 or less per month, including foreign workers.

Immigration Act 1959/63

This law governs the entry and employment of non-citizens in Malaysia.

Employers are responsible for ensuring their foreign workers have valid work permits and visas at all times.

Guidelines by the Department of Labour (JTK)

The JTK provides additional rules and enforcement procedures, including reporting obligations, accommodation standards, contract requirements, and worker welfare practices.

Basic Rights of Foreign Workers in Malaysia

Foreign workers are entitled to the same core rights as Malaysian employees. These include:

Minimum Wage

As of February 2025, the national minimum wage is RM1,700 per month in urban areas such as Kuala Lumpur, Selangor, Johor Bahru, and Penang. In less developed areas, the amount may differ slightly.

Working Hours and Rest Days

A standard workweek is 48 hours (8 hours per day over six days).
Workers are entitled to one rest day per week.
Overtime must be paid according to rates set by law.

Safe and Healthy Working Conditions

Employers must comply with occupational safety and health standards.

Workers should not be exposed to unsafe or hazardous conditions without proper protective measures.

Access to Medical Treatment

Employers are required to provide access to healthcare.

This can include panel clinics, insurance coverage, or public medical services, depending on the employment terms.

Right to Keep Personal Documents

Workers have the legal right to hold their own passports and identification documents.

Employers cannot confiscate them under any circumstances unless the worker gives written consent.

What Employers are Responsible For

If you hire foreign workers, your responsibilities include more than just paying their salary. You are expected to:

Provide a Valid Employment Contract

Contracts should be written in a language the worker understands and must include:

Job title and duties
Working hours
Salary and payment schedule
Leave entitlements
Disciplinary procedures and termination terms

Supply Proper Accommodation

Under the Workers’ Minimum Standards of Housing and Amenities Act 1990, employers must provide housing that is:

Safe, clean, and not overcrowded
Equipped with basic facilities such as toilets, kitchens, and sleeping areas
Compliant with space requirements and building safety standards

Make Required Contributions

Employers must pay:

The mandatory foreign worker levy
Contributions to SOCSO (Social Security Organization)
EPF (Employees Provident Fund), where applicable or agreed upon

Ensure Fair Treatment

Do not withhold wages or make unauthorized salary deductions
Do not abuse or discriminate against workers
Respect religious practices and cultural norms
Handle grievances through proper internal procedures

Common Mistakes Employers Should Avoid

Some employers unintentionally break the law due to poor HR practices or lack of awareness. Here are common mistakes to watch out for:

Withholding passports from workers without consent
Delaying salary payments or failing to pay overtime
Not providing rest days or leave entitlements
Failing to report hiring or termination of foreign workers to the Department of Labour
Providing unsafe or overcrowded housing

Regular HR training and compliance audits can help you avoid these issues.

Consequences of Non-Compliance

If you fail to meet your responsibilities as an employer, you may face:

Fines of up to RM100,000 depending on the offence
Imprisonment of up to five years for serious violations
Blacklisting, which prevents you from hiring foreign workers in the future
Reputation damage that may affect your brand, customer trust, and staff morale
Inspections or legal action by the Department of Labour or immigration authorities

Non-compliance also increases the risk of industrial disputes, absenteeism, and poor worker performance.

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