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
Employing Staff In Iskandar Malaysia Presentation Outline 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
Labour Force In Iskandar Malaysia Population of JB City : 0.5 million Entire Iskandar Region : 1.3 million
Employment Law & Guidelines Wages (wef 01/01/2013) Minimum Wage: RM900/mth or RM4.33 per hour 4 weeks < 2years, 6 weeks 2 – 5 years, 8 weeks >5 Termination Notice years Probation 3 to 6 months Min 8 days for 1 st year, 12 days for 2 nd to 5 th year Annual Leave 16 days for 5 th year onwards Min 14 days for 1 st 2 years, 18 days for 2 nd to 5 th year Sick Leave and 22 days for 5 th 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
Employment Law & Guidelines Normal Day : 1.5 x hourly pay rate Over Time Pay 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
Typical Salary Ranges – Factory Warehouse Operation 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
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.
Challenges in Hiring Local Staff 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
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
Types of Employment Visas • 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)
Processing of Employment Pass Expatriate Services MYXpats Centre Division (Talent Corp + (Immigration) Immigration) •Employer’s • Pass application Registration • Pass processing
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
Employment Pass – Application Costs & Levy Government Application Costs : <RM1000 Levy (Manufacturing Sector) : RM1,200 per year Professional Service Fees: Negotiable
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 a An Indonesian filling up some forms to get himself registered under the 6P programme at Kuala Lumpur, in December last year. 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 .
Foreign Workers Recruitment Process Manufacturing Industries 1 st step • Ministry of Trade & Industry (MITI) 2 nd • Ministry of Home Affairs Step 3 rd Step • Immigration Engage 4th Foreign Step Agents
Outsourcing System in Foreign Manpower Supply 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
Quotas & Levies for Foreign Workers Iskandar Annual Salary * Annual Levy Quota Manufacturing RM10,800 RM1,250 1 local : 3 (SGD4,000) (SGD460) foreigner Singapore Annual Salary * Annual Levy Quota Manufacturing SGD12,000 SGD3,000 to 60% of total SGD9,000 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 Source: Malaysian Employers Federation Guide – Dec 2014 Immigration Department Note: Singapore – SGD5,000 for all NTS countries such as the above
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
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