Malaysia Aims to Reduce Dependence on Foreign Workers to 10% by 2030

The Malaysian government, led by Prime Minister Datuk Seri Anwar Ibrahim, has set a goal to reduce the country's dependence on foreign workers to 10% by 2030, from the current 15%. This aim is part of the 13th Malaysia Plan (13MP), which aims to enhance the country's competitiveness and address challenges related to low wages and productivity. To achieve this goal, the government plans to implement a multi-tiered levy mechanism (MTLM) in 2026, which will encourage employers to shift towards automation, mechanisation, and the hiring of local workers. The MTLM will also channel additional levy collections into a trust fund to promote automation and mechanisation. At the same time, the government will tighten the issuance requirements for temporary employment visit passes, prioritize local workers in filling job vacancies, and implement other labour market reforms to guide the transformation of the labour market over the next five years.

Key Takeaways:

• The Malaysian government aims to reduce dependence on foreign workers to 10% by 2030 from the current 15%.
• The government plans to implement a multi-tiered levy mechanism (MTLM) in 2026, which will encourage employers to shift towards automation, mechanisation, and the hiring of local workers.
• The MTLM will channel additional levy collections into a trust fund to promote automation and mechanisation.
• The issuance requirements for temporary employment visit passes will be tightened, including stricter eligibility criteria for employer and sector transfers, restrictions on business activities, and the imposition of shorter maximum employment periods.
• All foreign worker applications will be required to go through a clearing house to be established, ensuring local workers are prioritised in filling job vacancies.
• The government aims to improve overall worker well-being, increase the participation of older workers, women, and persons with disabilities in the workforce, and improve labour management.
• The labour market reform will include accelerating comprehensive wage alignment and better aligning labour supply with industry demand.

Statistics:

• The current dependence on foreign workers is 15% and aims to be reduced to 10% by 2030.
• The implementation of the multi-tiered levy mechanism (MTLM) is planned for 2026.
• Additional levy collections from the MTLM will be channelled into a trust fund.
• The issuance requirements for temporary employment visit passes will be tightened, including stricter eligibility criteria.

Sources:

• "Kuala Lumpur: The government aims to reduce dependence on foreign workers to 10 per cent by 2030 from the current 15 per cent."

(Source: Prime Minister Datuk Seri Anwar Ibrahim, during the tabling of the 13th Malaysia Plan (13MP))