Malaysia’s 2025 Foreign Worker Policy Changes – What Employers Need to Know?
| The Malaysian government has introduced several important updates to foreign worker policies in 2025. These changes aim to reduce dependence on low-skilled foreign labor, improve worker protection, and strengthen the country’s labor management system.
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| Why did the government introduce these new policies?
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| The goal is to balance the need for foreign labor while encouraging companies to hire locals, invest in automation, and improve productivity. It also ensures better welfare and protection for foreign workers.
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| 2
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| What is the major change to worker welfare in 2025?
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| Starting October 2025, employers must contribute to the Employees Provident Fund (EPF) for foreign workers. This helps them build retirement savings and provides social protection benefits.
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| 3
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| Will labor costs increase for employers?
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| Yes. Two main changes will increase employer costs:
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- The multi-tier levy system (higher levy for sectors heavily reliant on foreign labor).
- The new minimum wage of RM1,700 for most employers starting August 2025.
- These adjustments aim to reflect the real cost of hiring and promote fair wages.
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| 4
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| Can foreign workers change employers under the new rules?
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| Yes. Foreign workers can now change employers across different economic sectors (subject to approval). This improves labor market flexibility and helps prevent exploitation.
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| 5
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| What changes have been made to the visa application process?
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| All applications are now processed through the MyVISA 2.0 online system, launched on 1 August 2025. This is to reduce paperwork, speed up approvals, and increase transparency.
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| 6
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| Are there new rules for workers leaving Malaysia?
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| Yes. Employers must now be physically present at the airport or exit point to complete the worker’s departure registration using the Check-Out Memo system. Failure to comply may lead to penalties.
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| 7
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| What about enforcement and penalties?
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| The government has increased operations against:
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- Employers hiring undocumented workers
- Penalties are now heavier to discourage illegal practices.
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- Recruitment syndicates
- Corrupt intermediaries
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| 8
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| What is the overall objective of these changes?
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| To build a more controlled, efficient, and fair labor system that protects workers, reduces the misuse of foreign labor, and supports Malaysia’s long-term economic goals.
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