In the manufacturing sector it is the responsibility of the employer to submit the application on behalf of the foreigner and see that the Work Permit is obtained. Work Permits are issued only to workers who meet the specific conditions and requirements prescribed for the manufacturing sector. Employers on their part are also expected to meet a few sector-specific conditions before a Work Permit can be issued to the worker on whose behalf the employer is applying.
Approved Source Countries/Territories
Foreigners belonging to the following countries are eligible to apply for Work Pass in the construction sector: India, Malaysia, People's Republic of China, Sri Lanka, Thailand, Bangladesh, The Republic of the Union of Myanmar, NTC countries (Non Traditional Countries) Philippines, North Asian Sources (NAS): Macau, Hong Kong, South Korea and Taiwan.
Quota Restrictions in Employing Foreigners (Dependency Ceiling/Quota)
As far as the manufacturing sector is concerned, it is mandatory for the employers to employ 40% of the workforce from locally available talent. The remaining 60% can be filled in by employing foreigners.
Activities coming under the Manufacturing Sector
Here are the types of activities under which employers can apply for Work Permit for the Manufacturing Sector:
- Manufacture of electronic components
- Manufacture of pharmaceuticals and other biological products
- Manufacture of basic industrial alkalis and acids
- Setting up Mechanical Engineering Works
- Manufacture of waxes, polishes, soaps and deodorants
- Manufacture of oil/gas rigs and machinery
- Electroplating, hot-dip galvanizing, heat treatment and die-casting/steel casting
- Semiconductor wafer fabrication plants
- Food processing Industry
Certain industries like laundry, packaging of goods, dishwashing services in factories, bakeries located in housing estates etc are not considered as coming under the manufacturing sector and are not eligible for Work Permit.
- Manufacturing in the food processing industry requires obtaining AVA licence
- Workers holding Work Permit and S Pass cannot be employed in the retail outlets
- Every manufacturing company needs to be registered and should possess valid factory notification or licence.
Foreign Worker Levy
The company that is in the manufacturing sector needs to restrict the number of foreigners as employees in the prescribed ratio, and also need to pay a Foreign Worker Levy for every worker in their employment. The amount of Levy is not fixed and will depend on the qualifications of the worker hired and the current ceiling/quota applicable to the manufacturing sector.
In certain cases the employers may be required to execute a Levy Bond as prescribed by the Ministry of Manpower (MOM)
- All employers whose workers' permits are cancelled due to non payment of Levy need to execute a Levy bond.
- Employers who do not pay levy fees on time, or those who default payments at least thrice in a 12 month period.
- Whenever there is change in ownership of a sole proprietorship concern.
Employers who are applying for Work Permit for workers originating from India, Sri Lanka, Thailand, Bangladesh, The Republic of the Union of Myanmar, People's Republic of China need to make the following applications and need to get prior approval before submitting application for Work Permit:
- Man Year Entitlement (MYE) to confirm eligibility
- Prior Approval (PA) as and when required
- In-Principle Approval (IPA) for each Work Permit
- Purchase of Security Bonds
As far as MYE and PA are concerned, they won't be required unless the Work Permit is applied on behalf of foreigners from Malaysia, Hong Kong, Macau, South Korea and Taiwan because an In-Principle Approval is sufficient for workers from these countries.
Note for Employers:
Employers cannot bring in non-Malaysian foreigners into the country before applying for the Work Permit.