This article first appeared in The Edge Malaysia Weekly on August 27, 2018 - September 2, 2018
IT has been widely reported that to secure work in Malaysia, migrant workers need to save a significant sum of money to pay off several layers of middlemen and government officials.
Some claim that workers from Bangladesh need at least RM20,000 to cover various fees, with a chunk of that going to the agent who handles the process in Malaysia.
According to a source, an agent who previously brought in foreign labour, it is “quite lucrative”, particularly for Bangladeshi workers. “Bangladeshi workers usually need to prepare around RM20,000 to start the process to get employed in Malaysia. Out of that, we get RM2,500 to RM3,000 for each worker that we bring in.”
He says the rates differ, depending on the nationality, and his agency mainly focused on Bangladeshis and Nepalis.
“For Nepali workers, we got less. I’m not sure how much in total they needed to pay to get into Malaysia, but on our side, we got about RM1,000 per worker,” he says.
According to him, the process starts when a company or employer approaches the agency in Malaysia to request for foreign labour.
The Malaysian agency then sends out a demand letter to an agent based in Bangladesh, who then compiles details of the workers and sends the information to Malaysia.
The Malaysian agent then processes the application and pays the foreign worker levy before obtaining a calling visa, also known as a VDR.
Before workers are sent to Malaysia, a medical examination is carried out in their home country. In Malaysia, a second medical check-up is carried out by the Foreign Workers Medical Examination Monitoring Agency (Fomema). If a worker is found to be unfit, he is sent home.
Upon arriving in Malaysia, the foreign workers have their biometrics (thumbprints) recorded by the Immigration Department.
Once all the boxes are checked, the agent is paid by his counterpart in the source country. The agent there gets his payment from the workers.
“I don’t charge the employers, as I get my payment from the agent in the source country. The employers would have to pay some government fees, though,” the source says.
He points out that local agents have to pay government fees and levies amounting to over RM2,000.
“We also had to pay ‘extra’ to the officers, around RM2,000. We still got a good amount, even though we are not one of the bigger players. It was still manageable with the other costs included,” he adds.
He declines to say how much the agency makes but says it is relatively little compared with the major players, which can earn hundreds of millions of ringgit a month.
Before the Sistem Perkhidmatan Pekerja Asing (SPPA) online registration system was introduced, his agency was compensated even more, receiving about RM5,000 per Bangladeshi worker, he says.
He claims that the previous system — before the introduction of Bestinet Sdn Bhd and the SPPA — was “better”. “Bestinet and SPPA was set up to sort of monopolise the market [so that only certain agencies can bring in foreign workers]. Previously, we dealt directly with the Home Ministry and Immigration without the hassle of dealing with Bestinet and SPPA.
“Bestinet and SPPA were just there for the money,” he says.
His firm has since stopped bringing in migrant workers and for the past year, has been handling local labour — recruiting workers from the peninsula, Sabah and Sarawak — mainly for the manufacturing sector.
This, he says, was partly because it was getting tougher for agents to operate, owing to the market monopoly.
“Under the previous government, the process of bringing in the workers was being monopolised to reduce the dependency on (other) agents. However, many of my clients — mostly in the manufacturing and agricultural segments — did not understand the process, so they still went through our agency to get foreign labour.
“Secondly, Malaysia’s unemployment rate is high currently and there is high demand for general workers, so we thought it was a good time to go local,” he explains.
Currently, his agency is focused on recruiting locals for manufacturing (factories), a sector he says is more rewarding, as manpower requirements are relatively larger than those of other sectors.
The locals present other challenges, however.
“Most of the locals are a bit lazy and they have the mentality that these jobs should be only for foreigners. We manage their expectations by saying they have better prospects than foreigners. The locals also get paid more.
“I also believe that I am doing my part to help society. The current government is promoting the hiring of locals, so it was a good switch,” he says.
He observes that the current government is looking to introduce a new, centralised system of bringing in migrant workers and hopes it will be better than Bestinet’s.
Save by subscribing to us for your print and/or digital copy.