Even though by law recruitment agencies are required to license themselves, deceptive and abusive practices are widespread. A ban on recruitment agency placement of workers from 1995 was lifted again, as a hiring trend could not be stopped. A massive increase in outsourcing companies derived from a policy in 2005. The policy required companies hiring fewer than 50 migrant workers to either directly recruit in the country of origin, or to make use of outsourcing companies. With the intention to make the recruitment system more efficient and flexible, the new system grew beyond the government’s capacity and led to abuses related to the fee amounts charged. This led to a halt of the issuance of licenses and work permits to outsourcing companies. Since 2013 the outsourcing system has been phased out.
The Eleventh Malaysia Plan confirms the change in policy and states that the Ministry of Human Resources is now fully responsible for regulating the recruitment of migrant workers. The role of outsourcing companies and other intermediaries has been fully eliminated. However, current outsourcing companies still hold valid licenses until 2021. The companies often do not provide migrants with acceptable housing facilities, stable employment, freedom of movement or the legal minimum wage.
Insurance and health care used to be a big problem for migrant workers, but since 2012 it is mandatory for all foreign workers to have the Hospitalization and Surgical Scheme; the premium is to be paid by either employers or employees. Domestic workers are, however, excluded from many basic labour protections, including regulations on work hours, rest days, public holidays, annual leave, sick leave, minimum wage rules or social security coverage. A recent labour reforms should boost earnings for migrant workers, as employers are not allowed to deduct a foreign workers’ levy from their wages anymore.
Find out more about the degree of respect for workers rights in this country based on ITUC Global Rights Index here.