Employment association: Prolonged freeze forcing firms to hire undocumented workers

New Straits Times

2 days ago

KUALA LUMPUR: Prolonged government restrictions on the hiring of foreign workers are forcing many Malaysian businesses to turn to undocumented foreign workers as a last resort, the Association of Employment Agencies Malaysia (Papa) said.
Its president, Datuk Foo Yong Hooi, said employers unable to meet stringent requirements or who missed the narrow quota application window are now struggling to keep their operations afloat.
He said the foreign worker quota application process, which was last reopened between July 2022 and March 2023 before being frozen again, has left many employers in limbo.
"Many foreign workers' contracts last only two to three years. With the freeze in place for over two years, those who did not secure quotas during the brief window between July 2022 and March 2023 have seen their workers return to their home countries.
"Even employers who hired during that window are facing shortages as workers leave. The prolonged freeze has severely worsened the situation," he said when contacted today.
The Immigration Department today said it had detained 1,005 employers for allegedly hiring or harbouring undocumented migrants between Jan 1 and July 3 this year.
Its director-general, Datuk Zakaria Shaaban, said the arrests involved employers from various sectors, including restaurants, factories and retail shops, with most being locals found sheltering foreign nationals without valid documents.
During the same period, the department conducted 6,913 operations nationwide, screened 97,322 foreigners and arrested 26,320 individuals for suspected immigration offences.
In January last year, the cabinet agreed to continue the freeze on the foreign workers quota introduced in March 2023.
Home Minister Datuk Seri Saifuddin Nasution Ismail said lifting the freeze was unnecessary as the total approved quota was already sufficient.
In October, he said the freeze on foreign worker employment quota applications would continue until a date to be announced later.
Commenting further, Foo said many employers struggle to secure quotas due to seemingly minor compliance issues, such as accommodation standards under the Workers' Minimum Standards of Housing and Amenities Act, or insufficient company sales figures.
He said the situation had also been compounded by the government's 15 per cent cap on foreign workers in the national workforce.
With around 900,000 undocumented workers recently legalised under the Workforce Recalibration Programme, Foo questioned whether including them within the cap was fair to law-abiding employers.
"This cap penalises those who have followed the rules. Employers who missed the quota window are now locked out, while others are allowed to legalise undocumented workers within the same limit," he said.
Foo also said that inaction would fuel further abscondment, as documented workers abandon jobs in search of higher wages, often becoming undocumented themselves in hopes of another legalisation programme.
As such, he urged the government to consider a temporary liberalisation of quotas for employers facing acute worker shortages since the freeze.
He also proposed that those who have hired undocumented workers be offered a quota exchange mechanism, allowing them to declare these workers and replace them with legal hires, on the condition that the original workers leave the country and re-enter legally.
"This approach will ease pressure on the Immigration Department, protect jobs, and prevent another influx of undocumented labour," he said.