New expatriate policy raises salary thresholds for all Employment Pass categories and introduces fixed employment durations, effective June 1.
PUTRAJAYA: A new policy governing the employment of expatriates in Malaysia will take effect on June 1.
The Home Ministry said the start date allows sufficient preparation time for employers and industry players.
The policy, agreed to by the Cabinet last October, includes a restructuring of salary thresholds for Employment Pass Categories I, II and III.
It also introduces fixed employment durations for expatriates, which were previously not clearly defined.
The ministry said the existing policy, based on a 2016 decision, was enhanced through engagement sessions with stakeholders since 2022.
The new policy aligns with the 13th Malaysia Plan to reduce reliance on foreign labour.
It prioritises qualified local talent to fill vacancies before considering expatriate hires.
“The setting of employment periods is intended to recognise highly skilled expatriates who continue to contribute to the country,” the ministry said in a statement.
It also serves as a guide for employers to plan structured succession strategies involving local talent.
The ministry will conduct briefings with all stakeholders to explain the implementation mechanism.
This ensures a smooth, transparent transition that does not disrupt business operations.
The government said it will ensure reforms support sustainable economic growth and local human capital development.
Under the new policy, the Category I pass salary rises from RM10,000 to RM20,000 and above.
The Category II salary increases from RM5,000-RM9,999 to RM10,000-RM19,999.
The Category III salary is raised from RM3,000-RM4,999 to RM5,000-RM9,999.
An exception is made for the manufacturing and related services sector, set at RM7,000-RM9,999.
Employment duration for Category I and II passes is capped at 10 years.
The Category III pass is capped at five years, with Categories II and III subject to a succession plan.
All expatriates holding these passes are allowed to bring dependants.
