KUALA LUMPUR (Nov 3): The Malaysian Industrial Commercial & Service Employers Association (MICSEA) is calling on the Ministry of Human Resources (MOHR) to issue clear and structured guidelines on wage payment timelines for foreign workers, following a recent court ruling that employers must pay wages from the moment these workers arrive in Malaysia.
The call comes after the Shah Alam High Court upheld a Labour Court's ruling to award over RM760,000 in back wages to 93 foreign workers who were left stranded without jobs upon arriving in Malaysia, with the judge saying employers cannot treat foreign workers as a "reserve labour pool" as the court rejected the employers' argument that salary payments were conditional on actual work performed.
Subsequently, Human Resources Minister Steven Sim issued a statement saying that the judgement serves as a warning to employers who withhold pay and that the employment relationship — and the obligation to pay wages — begins upon the worker's arrival and not solely when work is assigned.
In a statement Monday, MICSEA president YK Lai said the association supports fair and timely remuneration for all workers — both local and foreign — in line with Section 19 of the Employment Act 1955, which mandates prompt payment of wages. The ruling also reinforces Malaysia’s commitment to ethical labour standards, he said.
However, MICSEA said employers face significant operational challenges in complying without clear procedures.
“Recruitment involves medical screening, training, accommodation and administrative onboarding before assignment to the workplace,” Lai noted. “Employers must be given structured implementation procedures to ensure uniform compliance and avoid unintended penalties for genuine employers.”
The employer group also highlighted several persistent challenges faced by employers in hiring foreign workers, including lengthy quota approvals, high upfront recruitment and levy costs, mid-process regulatory changes, and recurring costs related to accommodation and welfare.
These delays and costs exacerbate existing labour shortages, a problem the Federation of Malaysian Manufacturing found in a survey in August this year that has been hampering production, exports, and overall business competitiveness and economic growth.
MICSEA rejected claims that employers were “hoarding” foreign workers, describing such practices as “economically inefficient and ethically unacceptable”. It said perceptions of hoarding often stem from logistical and timing issues such as batch permit approvals or project delays, rather than deliberate non-compliance.
“Employers are often ready to hire but face bottlenecks in securing approved workers,” Lai said. “This situation should not be mistaken as reluctance to comply.”
It further affirmed its commitment to a fair and sustainable migrant labour system, and called for streamlined application processes, clearer wage payment guidelines, and consistent tripartite engagement between employers, MOHR and industry representatives.
“We are ready to work constructively with the government to protect workers’ rights while ensuring Malaysia’s operational stability and competitiveness,” Lai added.