NEW EXPATRIATE EMPLOYMENT POLICY TAKES EFFECT JUNE 1 - KDN

PUTRAJAYA, Jan 14 (Bernama) -- The new expatriate employment policy will come into force on June 1, allowing sufficient preparation time for employers and industry players, the Home Ministry (KDN) said today.

In a statement, KDN said the Cabinet on Oct 17 last year, agreed to implement the new policy, which includes a restructuring of salary thresholds for Employment Pass Categories I, II and III, as well as the introduction of fixed employment durations for expatriates in Malaysia.

The ministry said the existing expatriate employment policy, based on decisions of the Economic Council meeting on Dec 20, 2016, had been enhanced through a series of engagement sessions with industry players and stakeholders since 2022.

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“The formulation of this new policy aligns with the objectives of the 13th Malaysia Plan (13MP) to reduce reliance on foreign labour and prioritise qualified local talent to fill vacancies before considering the hiring of expatriates,” the statement said.

In addition to salary adjustments, KDN said the policy introduces specific employment duration limits, which were previously not clearly defined.

“The setting of employment periods is not only intended to recognise highly skilled expatriates who continue to contribute to the country, but also to serve as a guide for employers to plan structured succession strategies with the involvement of local talent,” it said.

KDN said it will also conduct briefings and engagement sessions with all stakeholders, including industry players, employers and relevant agencies, to explain the implementation mechanism and policy implications.

This includes ensuring a smooth, transparent transition that does not disrupt business operations.

“In line with the Malaysia MADANI principles, the government will continue to ensure that policy reforms are implemented gradually and in the national interest, to support sustainable economic growth and long-term local human capital development,” the ministry said.

Under the new expatriate employment policy:

• Employment Pass Category I salary is raised from RM10,000 and above to RM20,000 and above.
• Employment Pass Category II salary is raised from RM5,000-RM9,999 to RM10,000-RM19,999.
• Employment Pass Category III salary is raised from RM3,000-RM4,999 to RM5,000-RM9,999, except for the manufacturing sector and manufacturing-related services (MRS), which is set at RM7,000-RM9,999.
• Employment Pass Category I duration is capped at 10 years.
• Employment Pass Category II duration is capped at 10 years, subject to a succession plan.
• Employment Pass Category III duration is capped at five years, subject to a succession plan.
• All expatriates holding Employment Pass Categories I, II and III are allowed to bring dependants.

-- BERNAMA