Labour Department sets new process for companies hiring foreign workers

IMPACT – MEDIUM

What is the change? The Labour Department of Brunei has introduced new procedures for companies to apply for a license to hire foreign workers. The Foreign Worker License has now replaced the Labour Quota License.

What does the change mean? Employers submitting applications for a Foreign Worker License must follow the new application procedures and rules, which include a local-to-foreign-worker ratio to be determined by the Labour Department in conjunction with other relevant governmental ministries and departments. Employers with existing Labour Quota Licenses are not affected and will continue to follow old rules until further notice by the Labour Department.

• Implementation time frame: The change took effect Oct. 1.
• Visas/permits affected: Foreign Worker License.
• Who is affected: Companies submitting new applications for a Foreign Worker License (formerly a Labour Quota License).
• Impact on processing times: Under the new procedures, the number of steps in the application process has been reduced from 12 to seven, and the processing time has been reduced from 41 days to nine.
• Business impact: The new process simplifies procedures, but requires companies seeking to hire foreign labor to employ a certain number of local workers for each foreign worker.

Background: The Labour Department and Interior Ministry introduced the new rules to make the process more efficient for businesses hiring foreign nationals, as well as to give priority to local workers for jobs in certain industries. The required ratios of local to foreign workers have not been announced, but will be introduced in stages and will depend on the industry. Companies applying for a Foreign Worker License will undergo inspection only after issuance of the license instead of before issuance, which was the case under the old regime (employers in the construction industry, however, will undergo inspection both before and after issuance of the license).

BAL Analysis: The new process will bring faster processing times, but a greater focus on localization of the workforce. Companies that have existing Labour Quota Licenses may continue to apply for renewal of their labor quotas and request additional quota positions according to the old rules. BAL will update clients if the labor authorities provide further announcement.

This alert has been provided by the BAL Global Practice group and our network provider located in Brunei. For additional information, please contact your BAL attorney.

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