Employers must use online system to file foreign-worker projections

IMPACT – LOW

What is the change? Employers filing their annual projections of how many foreign workers they plan to hire (FKH projections) are now required to use Malaysia’s Expatriate Services Division online portal.

What does the change mean? Employers who have not filed their FKH projections via the ESD portal will be barred from filing or renewing pass applications of any type until they do so.

• Implementation timeframe: The requirement that FKH projections be filed with the ESD portal went into effect Jan. 1.
• Visas/permits affected: Employment Passes, Professional Visit Passes and related Dependent Passes or Long Term Social Visit Passes.
• Who is affected: Companies planning to employ foreign nationals.
• Impact on processing times: Employers who do not file their FKH projections properly will have their pass applications delayed until they file them via the portal.
• Business impact: The new requirement will have no major impact on businesses that follow the new filing procedure. However, businesses that file FKH projections improperly may see delays in start dates of foreign national employees who need an Employment Pass or Professional Visit Pass.
• Next steps: Employers who have not filed their FKH projections through the ESD portal should do so immediately.

Background: Beginning in March 2014, Malaysian authorities began requiring companies hiring foreign nationals to use the ESD portal. Oil, gas and energy companies were the first required to use the portal, and the program was eventually extended to other industries. Employers are now required to use the portal for almost all immigration-related filings in Malaysia.

The mandatory filling of FKH projections is not new, nor are the penalties for failure to file. The new requirement is that employers must file FKH projections using the ESD portal.

BAL Analysis: Employers should be sure to use the portal for submission of their projections in order to avoid delays in processing. Employers will not be able to have pass applications processed or renewed for their employees or their employees’ dependents until they comply with this requirement.

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

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