3-month cool-off period for Malaysia's Cat III employment pass holders

The Malaysian Digital Economy Corp. (MDEC) has called for Category III employment pass holders to fulfil a three-month cooling-off period outside of Malaysia, upon renewal or change of jobs.

As a result, foreign employees applying for a fourth year of a Category III employment pass, either as a renewal or as a change of jobs, must exit Malaysia and serve a three-month cooling-off period.

The policy is expected to be implemented by 1 September, as shared by Berry Appleman & Leiden LLP (BAL) in the latest global migration update.

The employment pass Category III covers foreign nationals working in Malaysia for up to one year who are paid below the normal minimum salary of 5,000 ringgits (about US$1,240) per month. This pass is initially valid for one year and may be renewed twice.

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According to the new rule, at the end of the third year, employers who wish to sponsor the Category III worker for a fourth year must wait until the worker has exited Malaysia and satisfied a 90-day cooling-off period before they may apply.

BAL has urged employers to be aware of the additional change and its impact on business schedules. MDEC authorities are expected to release a circular with further details before the implementation date.

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