KATHMANDU:: Malaysia, which had halted hiring workers from Nepal since last May, has decided to recruit Nepali workers under a special quota system. Following the Malaysian government’s policy to allocate quotas for certain sectors, including plantations, demand for workers based on quotas has started to emerge in Nepal.
This week, the Malaysian embassy authenticated demand letters for 1,780 workers submitted by employers in Malaysia, according to Rajendra Bhandari, president of the Nepal Association of Foreign Employment Agencies. Soon, manpower companies will start publishing advertisements and obtaining pre-approval for these job placements. Malaysia’s plantation sector, under its Ministry of Plantation and Commodities, is the primary area for hiring, with an estimated demand for about 40,000 workers.
Manpower agencies had already submitted demand letters for plantation workers to the Nepalese embassy in Kuala Lumpur about a month ago. However, the embassy had delayed the authentication process due to various reasons. Now, the embassy has expedited the verification process, enabling a limited number of Nepali workers to secure jobs in Malaysia.
In March 2023, Malaysia had decided to restrict foreign workers to just 15% of its total workforce, effective June 1, 2024. However, on September 15, the Malaysian government reviewed and extended the quota policy, allowing workers in select sectors such as plantations.
Challenges for Labor-Supplying Countries
Malaysia’s quota-based hiring policy has created difficulties for labor-supplying nations like Nepal. Since last May, no new Nepali workers have been able to secure jobs in Malaysia. Additionally, stricter policies have led to an increase in Nepali workers overstaying their contracts or leaving their jobs without notice. Many workers opt to extend their contracts or delay returning due to better job opportunities.
Malaysia’s Ministry of Finance has capped foreign workers at 15% of the total workforce, which stands at approximately 17 million. Currently, over 2 million migrant workers are employed in Malaysia, including more than 300,000 Nepalis.
Nepali workers have historically preferred Malaysia due to its climate, which is similar to Nepal’s, and the availability of unskilled jobs. Before the restrictions, an average of 8,000 Nepali workers migrated to Malaysia monthly. Malaysia was the second-largest labor destination for Nepalis after the UAE.
New Employment Opportunities and Challenges
Despite the restrictions, Malaysia’s economic struggles have led it to reopen recruitment for certain specialized sectors, including plantations. Meghnath Bhurtel, General Secretary of the Foreign Employment Federation, estimates that around 4,000 Nepali workers could now secure plantation jobs in Malaysia. “The halted demand letters are being authenticated, and Nepalis will have opportunities in the open sectors,” he said.
However, uncertainty surrounds the labor agreement signed in 2018 between Nepal and Malaysia, as it has not been revised to reflect the current employment scenario.
Improved Social Security and Wage Policies
Malaysia has introduced new social security measures for foreign workers. Starting this year, all migrant workers must contribute to the Employees Provident Fund (EPF). Announcing the 2025 budget, Malaysian Prime Minister Anwar Ibrahim declared the gradual implementation of this policy, ensuring international standards of treatment for migrant workers. The initiative is expected to benefit approximately 2 million foreign workers.
Additionally, Malaysia will raise the minimum monthly wage from RM 1,500 to RM 1,700, effective February 1, 2025. For employers with fewer than five workers, the new wage system will also come into effect soon. Before implementation, the Ministry of Human Resources plans to publish a comprehensive wage guideline for all sectors.
While the current minimum wage is RM 1,500, entry-level salaries in technical industries already exceed RM 2,300.
These changes reflect Malaysia’s commitment to improving conditions for migrant workers while balancing its labor market demands.