New Malaysian rules impact employment passes, professional visit passes

Effective August 1 2016, Malaysian authorities will start implementing new policies and reinforcing existing regulations for work passes, including all categories of employment passes and professional visit passes.

A new advisory by Berry Appleman & Leiden (BAL) notes that employers will no longer be able to include allowances when calculating the minimum salary for work permit eligibility. In the past, this was allowed on a discretionary basis.

The rules also add stricter requirements for certain nationalities applying under the new employment permit category III.

The new rules affect the following categories of foreign workers:

• Those applying for regular employment passes (category I)
• Employment passes for a contract term of less than two years and meeting the minimum salary (category II)
• Employment passes for foreign nationals hired for a limited duration and earning less than the normal wage (category III, created last year).

Category I employment passes are valid for a minimum of two years (based on an employment contract of the same duration). Category II employment passes are valid for less than two years (based on the duration of the employment contract).

According to the BAL advisory, the minimum salary of 5,000 ringgits (about US$1,245) per month cannot include allowances, and the foreign national must show a copy of the approval letter when entering the country.

Similarly, for a professional visit pass, foreign employees must show a copy of the approval letter upon entering Malaysia.

Category III, on the other hand, is only appropriate for employment contracts with a maximum term of 12 months, where the minimum salary of 2,500 to 4,999.99 ringgits per month cannot include allowances.

Moreover, foreign nationals in this category are not eligible to bring their dependents.

Certain nationalities who are subject to entry visa requirements must apply for a "visa with reference", to be filed with the employment pass application before travelling to Malaysia.

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Additionally, employees working in construction, manufacturing and mining industries from the following countries must undergo a medical examination as part of their employment pass application:

• Bangladesh
• Cambodia
• India
• Indonesia
• Kazakhstan
• Laos
• Myanmar
• Nepal
• Pakistan
• The Philippines
• Sri Lanka
• Thailand
• Turkmenistan
• Uzbekistan
• Vietnam

Analysing the developments, BAL notes: "Although some of the policies have been in place for some time, the authorities are emphasising strict reinforcement of all rules moving forward."

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