6 July 2023
Immigration
Impact: High
Summary
Referring to the latest Frequently Asked Questions (FAQ) issued by the Social Security Organisation (SOCSO), effective 15 June 2023, employers are now required to advertise job positions to local talents on the MyFutureJobs online portal for at least 14 days before they can proceed in employing expatriates for these positions. Previously, job positions were required to be advertised for at least 30 days before employers can submit the Hiring Outcome Report for SOCSO’s assessment and subsequent approval.
Furthermore, applications for conditional exemption for specialised skilled positions through submissions of the PDKK Form have now been removed and employers are now required to proceed with the standard 14-day job advertisement process for all positions that do not fall under any of the automatic exemptions, including specialised skilled positions.
The Detail
As part of the Government of Malaysia’s efforts in protecting the job market for local talents, employers in Malaysia are required to undergo labour market testing by advertising job positions to local talents on the MyFutureJobs online portal for at least 14 days before they can proceed in employing expatriates for these positions. Throughout the 14-day period, employers must conduct all the necessary interview sessions with candidates and employers may submit the Hiring Outcome Report as early as the 8th day of the job posting for SOCSO’s assessment.
Once the Hiring Outcome Report is submitted to SOCSO, it will take approximately 3 working days for SOCSO to inform the employers of the outcome of the application through email. Employers must ensure that the relevant checkbox for ‘foreign / expatriate’ is selected in the job advertisement as this would serve as an indication to SOCSO that that specific job advertisement is a prerequisite to employing an expatriate.
Under the new FAQ issued by SOCSO, the overall processing time for the job advertisement process has been significantly reduced. Previously, employers were only allowed to submit the Hiring Outcome Report after the job positions were advertised for at least 30 days on the MyFutureJobs online portal. Thereafter, it would take approximately an additional month for the outcome of the application to be issued by SOCSO. As such, a considerable amount of time for the labour market testing had to be factored in by employers in the overall timeline and process of obtaining an Employment Pass for expatriate employees.
Separately, for positions requiring specialised skills of expatriates, employers are no longer allowed to apply for an exemption of the job advertisement requirement through the PDKK Form. Employers must now undergo the standard 14-day job advertisement process for these specialised skilled positions.
Positions which fall under any of the following categories are automatically exempted from the job advertisement requirement and employers can proceed in applying for Employment Passes for these positions from the relevant Immigration authority:
● Expatriates with key roles in the company, e.g. C-suite, key positions
● Expatriates with a monthly salary of MYR15,000 and above
● Expatriates who are hired as part of the set-up of Regional Office or Representative Office in Malaysia under the manufacturing and services sector to carry out activities for the company’s headquarters
● Investors, shareholders and company owners
● Corporate transfers, placements and trade agreements
● International organisations, i.e. organisations subject to the International Organisations (Privileges and Immunities) Act
● Athletes / professionals joining any sports organisation / club in Malaysia
● Employment Pass renewal applications for approved positions
● Change of job title on the condition that the job scope remains the same as per the previous position’s job scope
It must be reiterated that the labour market testing is only applicable for Employment Passes. Other types of passes such as, but not limited to, Professional Visit Passes, Resident Pass-Talent, Dependant Passes and Permission to Work are not required to undergo the labour market testing.
The job advertisement process for employment of expatriates and non-residents in Sabah and Sarawak remains unchanged.
What this means
Whilst labour market testing remains an important facet in the government’s efforts in protecting the job market and addressing concerns over the unemployment rate in Malaysia, the lengthy processing time in completing the job advertisement process and obtaining the approval letter from SOCSO have been proven to be challenging for employers, especially when there is a need to employ expatriates on an urgent basis due to immediate business needs. With the new reduced overall processing time for labour market testing, employers would now be able to employ expatriate employees for positions requiring foreign expertise within a shorter turnaround time and therefore, businesses would be less impacted due to delays in assignment start dates of expatriates in Malaysia.
How we can help
Our team is able to assist you in understanding the labour market testing in Malaysia under the MyFutureJobs framework in greater detail and supporting you with certain aspects of the job advertisement process. In the meantime, our team is closely monitoring the implementation of the new labour market testing policies by SOCSO and we will provide you with the relevant updates from time to time.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
• Sasha Reddy, Partner | sasha.reddy@vialto.com
• Hana Rabi, Manager | hana.rabi@vialto.com
Further information on Vialto Partners can be found here: www.vialtopartners.com
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