share on
In addition to salary adjustments, the policy will introduce an expatriate employment period, in which employers can craft a more structured succession plan for its employees.
In a move to balance local talent development with global competitiveness, the Malaysia Government has announced a comprehensive revamp of its expatriate employment policy.
Effective 1 June 2026, the new framework restructures salary rates for Category I, II and III Employment Pass holders and introduces defined employment periods. This policy builds upon the existing framework established following the Economic Council Meeting on 20 December 2016 and reflects extensive consultations with industry stakeholders conducted since 2022.
In this regard, and aligned with the MADANI principles and the 13th Malaysia Plan, the policy aims to reduce reliance on foreign labour and prioritise qualified, local talent to fill job vacancies before considering hiring expatriates.
Here is a breakdown of the upcoming expatriate employment policy:
Increased salary ranges
- Salaries of Category I Employment Pass expatriates will increase from RM10,000 and above to RM20,000 and above monthly.
- Salaries of Category II Employment Pass expatriates will increase from RM5,000 – RM9,999 to RM10,000 – RM19,999 monthly.
- Salaries of Category III Employment Pass expatriates will increase from RM3,000 – RM4,999 to RM5,000 – RM9,999 monthly, except for the manufacturing and manufacturing related services (MRS) sectors which are set at RM7,000 – RM9,999 monthly.
Employment period
- The employment period of the Category I Employment Pass will be set at 10 years.
- The employment period of the Category II Employment Pass is set at 10 years with a succession plan.
- The employment period of the Category III Employment Pass is set at five years with a succession plan.
- All expatriates holding Category I, II and III Employment Passes are allowed to bring dependents.
Ahead of the policy's full implementation, KDN will schedule a closed-door meeting and engagement session with various stakeholders — including industry, employers and related agencies — to explain the implementation process, outline policy implications, and provide guidance to ensure a smooth transition that safeguards business continuity.
KDN said it will "continue to ensure that every policy reform is implemented in a phased, balanced, and nationally based manner, to ensure sustainable economic growth and the development of local human capital in the long term."
READ MORE: EPF and JIM tighten enforcement of mandatory EPF contributions for non-Malaysian workers
share on
