Foreign Manpower Cost Rising

31 Jul 2017


It is now more expensive to hire foreign workers in Malaysia, revealed Master Builders Association Chairman Foo Chek Lee in a report by the Sun Daily.

“The cost for hiring foreign workers has now surpassed that for local workers due to our devalued currency, insurance and other incidental costs in the recruitment process.”

He noted that the cost of rehiring overseas manpower is also high as the prevailing rules are stricter than the 6P programme which ended three years ago.

“Previously, any illegal foreign worker can register under 6P.” But to qualify under the present rules, the applicant must have entered the country before 31 March 2016.

“Under 6P, registration can be done with Immigration Malaysia for free or via agents for a fee of RM30.” But now employers must hire overseas workers via appointed vendors and this involves a processing fee of RM1,200.

Moreover, companies need to pay a levy of RM1,850 for each foreign construction workers they hire. On average, the cost of rehiring amounts to around RM3,000 per overseas worker.

This already includes insurance coverage, vendor fees and immigration charges, but the cost varies based on the company’s industry and the worker’s nationality.

Given the higher manpower cost, Malaysia’s construction sector in now facing a shortage of workers. As such, building projects may be delayed, while maintenance of existing structures could be negatively affected.

“The delay will definitely affect the revenue of construction works, which varies from project to project. As it is, the cost of running a construction business has increased, and with the cost of rehiring, the revenue of construction companies will definitely be adversely impacted,” Foo explained.

He added that more illegal workers may apply to be rehired if the requirements are not so stringent and the charges are not too high.

Notably, the rehiring process for illegal foreign workers has been extended until December 2017 from last year’s previous deadline. This is being overseen by three appointed vendors — Bukti Megah Sdn Bhd and MyEG Services Bhd, as well as International Resources and Net Marketing Sdn Bhd.


Image sourced from Human Resources Onliner


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