Malaysia's Most Comprehensive Foreign Worker Management

Act 446 was enforced starting June 1, 2020.

Act 446 applies to:

• Employers
• Centralized accommodation providers
• All employment sectors in Peninsular Malaysia and the Federal Territory of Labuan

The Act aims to:

• Regulate housing standards across all employment sectors
• Ensure minimum standards for worker accommodation and amenities
• Combat forced labor practices
• Protect workers’ welfare and rights
• Enhance safety and health standards for worker housing
• Support organized and conducive living environments aligned with national planning

All employers and centralized accommodation providers must obtain an Accommodation Certificate from the Director General of Manpower.

No, such housing is exempted from requiring an Accommodation Certificate.

• Employers: Fine up to RM50,000
• Accommodation Providers: Fine up to RM50,000, or imprisonment up to 1 year, or both

• Terrace House
• Shop House
• Bungalow
• Apartment/Flat
• Village House
• Office Shop
• Cabin
• SoHo/SoFo
• Other approved structures by PBT

A. Before Applying to JTKSM

Prepare the following documents:

a) For New Buildings

• Certificate of Completion and Compliance (CCC) from PBT

b) For Temporary/Non-Residential Buildings

• Building Permit for limited period (PBT)
• Approval for change of use or building modification (PBT)

c) For Rented Buildings

• PBT permission (if applicable)

B. JTKSM Application Process

i) Submit two copies of Form AC1 (downloadable from jtksm.mohr.gov.my)

ii) Processing fees:

iii) Include company registration (SSM)

iv) Attach relevant documents:

• CCC
• Temporary Building Permit
• Change of Use Approval
• Lease Agreement
• Floor Plan
• Photos of building (interior and exterior)

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• Employers must register with the Ministry of Human Resources (MOHR) and obtain approval for hiring foreign workers, typically through the ePPAx system from the Department of Labour Peninsular Malaysia (JTKSM) before proceeding with other applications.
• Foreign workers must have valid work permits (e.g., Temporary Employment Visit Pass - PLKS, Employment Pass - EP) and visas issued by the Immigration Department of Malaysia.
• Employers are responsible for ensuring safe and proper accommodation, complying with Act 446.
• Employers must comply with the Employment Act 1955, including fair wages, working hours, and workplace safety.
• Mandatory medical screening (FOMEMA) and insurance coverage (e.g., SOCSO Employment Injury Scheme) are required for all foreign workers.

• Obtain and maintain a valid Accommodation Certificate under Act 446.
• Conduct regular inspections and maintenance of housing facilities.
• Ensure adequate amenities such as clean water, sanitation, ventilation, and fire safety measures.
• Provide training and education to workers regarding their rights and housing rules.
• Keep detailed records and documentation for audit and inspection by authorities.

• Ensuring compliance with evolving regulations and standards.
• Balancing cost efficiency with quality and safety of housing.
• Managing overcrowding and maintaining hygiene standards.
• Addressing language and cultural barriers between workers and management.
• Coordinating with government authorities and third-party accommodation providers.

Yes, employers have a broader duty of care that includes:

• Providing safe working conditions and ensuring compliance with labor laws.
• Offering access to medical care and health insurance (e.g., SOCSO coverage).
• Ensuring timely payment of wages and lawful deductions.
• Facilitating proper documentation, work permits, and renewals.
• Offering support for repatriation or employment termination as per regulations.

• Immediately notify the relevant enforcement authorities, such as the Department of Labour.
• Conduct a thorough review and rectify the issues to meet minimum standards.
• Implement corrective measures including repairs, sanitation improvements, and overcrowding reduction.
• Provide temporary alternative accommodation if necessary.
• Train management and staff on compliance and monitoring procedures to prevent recurrence.

The Foreign Worker Levy (FWL) is a financial contribution imposed by the Malaysian government to regulate the employment of foreign workers. Effective January 1, 2018, employers nationwide are required to pay the levy for both new foreign workers and those renewing their Temporary Employment Visit Pass (PLKS). The rates vary by sector (e.g., manufacturing, construction, services, plantation, agriculture) and region (Peninsular Malaysia, Sabah, Sarawak).

The levy is mandatory for employers hiring foreign workers under various passes, and the liability begins when the worker receives a valid work pass. Exemptions apply for certain categories like disabled foreign workers and some expatriates.

An employment contract for foreign workers should clearly outline:

• Employer and Worker Details: Names, addresses, and clear identification of the legal employer and worker.
• Job Title and Description: Specific role, responsibilities, and reporting lines.
• Employment Type: Whether permanent or contract-based, with specific start and end dates for contract workers.
• Compensation and Benefits: Salary, allowances (e.g., transport, housing), overtime pay calculation, bonuses, medical insurance, and contributions to social security (EPF and SOCSO).
• Working Hours: Standard hours, rest days, and compliance with Malaysian labor laws regarding overtime.
• Leave Entitlements: Annual leave, medical leave, public holidays, maternity, and paternity leave as per the Employment Act 1955.
• Probation Period: If applicable, with clear performance expectations.
• Termination and Notice Period: Conditions for termination, required notice periods, and grounds for dismissal.
• Confidentiality and Non-Disclosure: Clauses to protect proprietary information.
• Accommodation and Transport: Details if provided, including conditions and responsibilities.
• Insurance/Compensation: Particulars of insurance coverage (e.g., SOCSO) for death, occupational disease, or injury.

As of July 1, 2024, foreign employees below the age of 60 are generally covered under both the Social Security Organization (SOCSO) Employment Injury Scheme and Invalidity Scheme, similar to Malaysian employees. Those aged 60 and above are covered under the Employment Injury Scheme only. Employers are required to register their foreign employees via the PERKESO Assist Portal and contribute based on a percentage of the worker's monthly wages.

Benefits under these schemes can include medical treatment, temporary and permanent disablement benefits, dependents' benefits, funeral benefits, and rehabilitation services, providing a crucial safety net for foreign workers in Malaysia.

Several mechanisms are in place to address foreign worker grievances:

• Department of Labour Peninsular Malaysia (JTKSM): Workers can lodge complaints directly with JTKSM regarding employment issues, unpaid wages, or non-compliance with labor laws.
• Working For Workers (WFW) App: This digital channel, an initiative by the Ministry of Human Resources, allows both local and foreign workers to voice concerns confidentially and report issues related to employment and welfare. It facilitates communication with management and government agencies.
• Company-level Grievance Mechanisms: Employers are encouraged to establish clear, accessible, and confidential internal grievance procedures to address worker concerns directly.
• NGOs and Embassies: Various non-governmental organizations and workers' respective embassies also offer support, advice, and assistance to foreign workers facing exploitation or disputes.
• JustGoodWork Malaysia App: This app provides information on migrant workers' legal rights and guidance on how to raise issues at work, including a confidential, third-party reporting route if other methods fails.

These mechanisms aim to ensure that foreign workers have avenues to seek justice and protection without fear of retaliation.

Employers are required to report certain events concerning their foreign workers to the Immigration Department of Malaysia, particularly under Section 55B of the Immigration Act 1959/63. Key reporting requirements include:

• Departure/Repatriation: Employers must notify the Immigration Department within a specified timeframe (e.g., 30 days) of a foreign worker's departure from Malaysia or repatriation.
• Abscondment: If a foreign worker absconds from employment, the employer must lodge a police report and inform the Immigration Department promptly (e.g., within 24 hours of discovery) to avoid penalties.
• Change of Address: Any change in the foreign worker's residential address should be updated with the Immigration Department.
• Termination of Employment: Employers must inform the Immigration Department upon the termination of a foreign worker's employment.
• Death of Worker: In the unfortunate event of a foreign worker's death, the employer must inform the Immigration Department and assist with repatriation of remains if requested.

Failure to comply with these reporting requirements can lead to fines, imprisonment, or other penalties as stipulated in the Immigration Act.

Generally, foreign workers on a Temporary Employment Visit Pass (PLKS) are tied to a specific employer and sector. Changing employers is typically not allowed under the current regulations, except in very specific circumstances and with prior approval from the Immigration Department and relevant ministries. These exceptions are rare and usually involve cases of abuse, exploitation, or specific government-approved programs.

Any unauthorized change of employer can lead to the foreign worker being deemed an illegal immigrant and face penalties, including deportation, while the new employer could also face legal action for hiring undocumented workers.

Upon the expiration or termination of a foreign worker's contract, the employer is generally responsible for their repatriation. The process typically involves:

• Issuance of Exit Pass/Special Pass: The employer must apply for an Exit Pass or Special Pass from the Immigration Department to facilitate the worker's departure. This ensures the worker leaves the country legally.
• Flight Arrangements: The employer is usually responsible for arranging and bearing the cost of the worker's return flight to their home country.
• Settlement of Dues: All outstanding wages, benefits, and allowances owed to the worker must be settled before their departure.
• Notification to Authorities: The Immigration Department must be informed of the worker's departure.
• Medical Check-up: In some cases, a final medical check-up might be required before repatriation.

It is crucial for employers to follow these procedures to avoid legal issues and ensure a humane and orderly departure for their foreign workers.