Employing Staff In Iskandar

Malaysia:How Best to do it?

13 May 2015

Alex ChongGeneral Manager-Singapore/MalaysiaJobPlus Pte Ltd SearchPlus Asia Pte LtdMOM 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 BhdMalaysian 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 month13% 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 PASSCategory 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 CapitalEquity 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

aAn 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.

1st step • Ministry of Trade & Industry (MITI)

2nd

Step• Ministry of Home Affairs

3rd Step• Immigration

4th Step

Foreign Workers Recruitment ProcessManufacturing 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 169876Tel: 65-67339388 www.jobplus.sg

Thank You