Malaysia: How Best to do it? 13 May 2015 Alex Chong General - - PowerPoint PPT Presentation

Employing Staff In Iskandar Malaysia:

How Best to do it?

13 May 2015

Alex Chong

General Manager-Singapore/Malaysia JobPlus Pte Ltd SearchPlus Asia Pte Ltd

MOM Reg: R1105591

Mobile: 65-91005539 Singapore Ministry of Manpower Lic No: 03C4955 www.jobplus.sg www.searchplus.sg In Iskandar Malaysia Work In Association with Alphajobs Sdn Bhd

Malaysian Licensed Employment Agency

• Labour Laws & Guidelines
• General Market Salary Overview
• Recruitment Challenges
• Employment of Foreigners – Criteria & Process

A) Expatriates & Semi Professionals B) Foreign Workers

• Sources of Foreign Workers
• Levies, Quota & Cost Of Hiring Foreign Workers

Employing Staff In Iskandar Malaysia Presentation Outline

Population of JB City : 0.5 million Entire Iskandar Region : 1.3 million

Labour Force In Iskandar Malaysia

Employment Law & Guidelines

Wages (wef 01/01/2013) Minimum Wage: RM900/mth or RM4.33 per hour Termination Notice 4 weeks < 2years, 6 weeks 2 – 5 years, 8 weeks >5 years Probation 3 to 6 months Annual Leave Min 8 days for 1st year, 12 days for 2nd to 5th year 16 days for 5th year onwards Sick Leave Min 14 days for 1st 2 years, 18 days for 2nd to 5th year and 22 days for 5th year onwards Hospitalisation Leave 60 days Maternity Leave 60 days Working Hours Not more 48 hours per week, 12 hours per day Rest Day One day per week

Over Time Pay Normal Day : 1.5 x hourly pay rate Rest Day : 2.0 x hourly pay rate Public Holiday: 3.0 x hourly pay rate Employee Provident Fund (EPF) Employer: 12%for salary > RM5,000 per month 13% for salary <RM5,000 per month Employee: 11% SOCSO Contribution Employer : 1.75% of monthly wage Employee: 0.5% of month wage (subject to limit of RM2,900 salary) Retirement Age 55

Employment Law & Guidelines

Title

Experience Salary (RM)

Warehouse Manager 8-10 years 7000 - 10000 Warehouse Asst Manager 4-5 yrs 4500 - 7000 Warehouse Supervisor 3-5 yrs 3000 - 5000 Warehouse Executive 2-3 yrs 2500- 4000 Buyer 2-3 yrs 2500- 4000 Logistic Supervisor 3-5 yrs 2200- 3500 Stock Controller 2-3 yrs 1800 -2300 Forklift Driver 2-4 yrs 1400 -1800 Delivery Assistant 1-2 yrs 1300-1800 Storekeeper 1-2 yrs 1100-1800 Warehouse Assistant 1-3 yrs 900-1500 Packer 1-2 yrs 900-1200

Typical Salary Ranges – Factory Warehouse Operation

Challenges in Hiring Local Staff

In Iskandar, SMEs Face Same Old Labour Crunch

Some firms put move on hold; M'sian minister says KL will try to resolve the problem Dato’ Sri Mustapa Mohamed (International Trade & Industry Minister) : The dearth of human capital tops the concerns of Singapore businesses looking to move to the Iskandar region, he said.

• Proximity to Singapore
• Weak Malaysian Ringgit
• Full Employment (Unemployment Rate <4%)
• Low preference for technical/ vocational jobs
• Low Wages Low Productivity
• Overseas Migration of Malaysians to Work

Challenges in Hiring Local Staff

Sources of Local/ Malaysian Staff

• Rural to Urban Migration of Workers from Various

Parts of Malaysia including Sabah & Sarawak

• Local Public & Private Universities and Colleges
• Returning Malaysians From Singapore/Abroad
• TalentCorp - https://www.talentcorp.com.my/
• Jobs Malaysia -

http://www.jobsmalaysia.gov.my/jcs/index.faces

Employment Passes For Foreign Professionals in Malaysia

• Employment Pass (24 to 60 months)

Expatriate/ Professional Workers earning > RM5000 per month Professional Visit Visa – Short Term <12 months for technical training /installation of machines. In-principle approval for salary > RM8000 per month

EP Types EP – for applicants monthly salary of at least RM 5,000. EPII – for applicants monthly salary of at least RM 2,500 and up to RM 5,000. RP-T – for applicants earning monthly salary of at least RM 12,000

• Work Permits

Blue collar workers (subject to min wage of RM900 per month)

Types of Employment Visas

Expatriate Services Division (Immigration)

• Employer’s

Registration MYXpats Centre (Talent Corp + Immigration)

• Pass application
• Pass processing

Processing of Employment Pass

Processing of Employment Pass

Source: Immigration Department Website

EMPLOYMENT PASS

Category of Expatriates

• A. Key Post (Permanent)

Strategic level managerial posts to safeguard foreign companies interests and investments in Malaysia. Responsible for determining companies’ policies and direction.

• B. Time Post (Specific Time)

* Executive Posts (10 years)–Intermediate level supervisory /managerial & professional posts which require academic qualifications, work experience, skills. * Non-Executive Posts (5 years) – Technical positions that require technical or practical skills.

Employment Pass – Criteria

The following general criteria apply to all industries and sectors:

• Company’s Paid up Capital

Equity Paid up Capital 100% Malaysian Company RM250,000 Joint Venture (Malaysia and Foreign) RM350,000 100% foreign owned Company RM500,000

Source: Malaysian Investment Development Authority Guidebook

Employment Pass – Criteria

Salary Requirements

• Minimum salary of RM3,500 (Time Post) to RM5,000 per

month(Key Post) Minimum Age

• 27 years.

Working experience

• Minimum 5 years in related field.

Employment Pass – Quota

Manufacturing Companies: Paid Up Capital < USD200,000

• 1 expatriate key post only (time post position

subject to approval) Paid Up Capital >USD200,000 but < USD2million

• 5 expatriates including 1 key post

Paid Up Capital > USD2million

• 10 expatriates including 5 key posts

• Government Application Costs : <RM1000
• Levy (Manufacturing Sector) : RM1,200 per year
• Professional Service Fees: Negotiable

Employment Pass – Application Costs & Levy

Foreign Workers in Iskandar Malaysia

Total Foreign Workers in Malaysia as at 2013

2,250,322 2,080,386 excluding domestic maids

Source: Immigration Department

Source: Malaysian Employers Federation Guide – Dec 2014

Source: Malaysian Employers Federation Guide – Dec 2014

Work Permits – Iskandar

Foreign Workers can be employed in manufacturing sector Top 5 Source Countries for Manufacturing Industry

Indonesia, Bangladesh, Nepal, Myanmar, Vietnam

Foreign Workers Conditions: Not allowed to bring in family member Need Approval To Change Employer Maximum 5 years Work Permit

NEWS

Two-thirds of foreign workers in Malaysia are illegal

By Sean Augustin and Koi Kye Lee New Straits Times Thursday, Apr 12, 2012

KUALA LUMPUR - Dreaded by both employers and foreign workers, the large scale legalisation and amnesty exercise known as 6P has just concluded, bringing in the third phase of the exercise that will flush out the remainder of illegal immigrants who are working and staying among locals.

The government recorded 3.1 million foreign workers in the country, of which two-thirds are illegal.

1st step

• Ministry of Trade & Industry (MITI)

2nd Step

• Ministry of Home Affairs

3rd Step

• Immigration

4th Step

Foreign Workers Recruitment Process

Manufacturing Industries

• Engage

Foreign Agents

• Started In 2006 by government, a system where outsourcing

companies supply foreign workers to companies

• Employers pay outsourcing companies to source for workers
• Outsourcing companies negotiate contracts, arrange work permit,

pay workers, provide accommodation, food and insurance.

• Employers recruiting less than 50 foreign workers are required to go

through outsourcing companies

Outsourcing System in Foreign Manpower Supply

Quotas & Levies for Foreign Workers

Iskandar Annual Salary * Annual Levy Quota Manufacturing RM10,800 (SGD4,000) RM1,250 (SGD460) 1 local : 3 foreigner Singapore Annual Salary * Annual Levy Quota Manufacturing SGD12,000 SGD3,000 to SGD9,000 60% of total workforce

* Basic Salary Cost of a Factory Operator (excluding overtime)

Foreign Workers Security Bond

Nationality Bond Amount (RM) Indonesia 250 Cambodia 250 Bangladesh 500 Nepal 750 Philippines 1000 Vietnam 1500

Note: Singapore – SGD5,000 for all NTS countries such as the above

Source: Malaysian Employers Federation Guide – Dec 2014 Immigration Department

Levy

• Employer that have implemented minimum wage are

allowed to deduct actual amount of levy on a pro-rated monthly basis.

Accommodation

• Employer that have implemented minimum wage are

allowed to deduct RM50 per month

Conclusion

• Over

the past few years, the Malaysian government has streamlined and implemented many positive human resource policy changes to provide certainty to foreign investors.

• Various initiatives such as talentcorp and one-

stop service centres seek to lower the entry barriers for foreign talent to work in Malaysia

We offer the following services in Singapore & Malaysia :

• Recruitment of Permanent & Temporary Staff
• Work Passes Application
• Contract Staff & Payroll Management
• Human Resource Consultancy

151 Chin Swee Road #14-05 Manhattan House Singapore 169876 Tel: 65-67339388 www.jobplus.sg

Thank You