End of migrant amnesty drive leaves bosses facing labour gaps
PETALING JAYA: With the Migrant Repatriation Programme (PRM) 2.0 set to end this month, employers say the initiative has had uneven effects on labour supply, even as enforcement against illegal hiring continues.
As hundreds of employers have been reportedly fined for hiring undocumented workers, they said it underscored persistent compliance gaps despite the ongoing amnesty programme.
The Malaysian Employers Federation (MEF) said PRM has had “mixed but generally disruptive” effects, particularly in labour-intensive sectors such as manufacturing, construction, plantations and services.
Its president Datuk Dr Syed Hussain Syed Husman said the voluntary return of undocumented workers has created short-term labour shortages.
“Their sudden exit has created operational gaps and this has not been matched by timely legal recruitment,” he said when contacted.
He added that employers are facing higher costs and reduced productivity, especially where skilled or semi-skilled workers cannot be easily replaced.
While PRM 2.0 has raised awareness among businesses, Syed Hussain said this has led to more cautious behaviour rather than full compliance.
“The continued fines indicate deeper structural issues, including complex approval processes, inconsistent policies and delays in quota approvals,” he said, noting that limited access to legal hiring channels may be pushing some firms towards non-compliant arrangements.
He warned that repeated amnesty-style programmes could create a “moral hazard” where employers and workers assume that non-compliance may eventually be resolved through future regularisation exercises.
Federation of Malaysian Manufacturers (FMM) president Jacob Lee Chor Kok said labour shortages in the sector are not primarily due to PRM 2.0 but stem from restrictive hiring policies.
“Current recruitment rules are too narrowly defined and do not reflect actual operational needs.
“Many manufacturers with ongoing operations and confirmed orders are unable to replace workers lost through normal attrition,” he said.
Lee said most formal manufacturers do not rely on undocumented workers due to strict regulatory requirements, customer audits and international compliance standards.
“PRM 2.0 is not the main cause of labour shortages in manufacturing,” he said, adding that any impact is more likely indirect through disruptions elsewhere in the supply chain.
On enforcement, Lee said manufacturers already operate under strong pressure to comply, particularly in export-oriented industries where non-compliance can affect market access and business continuity.
“Formal sector employers already have strong incentives to comply,” he said.
He added that continued enforcement points to broader gaps in the labour ecosystem, including illegal business activities and networks that enable undocumented workers to remain.
“Enforcement must be targeted not only at employers but also at the wider ecosystem that sustains such practices,” he said.
Both MEF and FMM agreed that stricter enforcement alone will not resolve the issue without reforms to the legal hiring framework.
They said employers continued to describe current recruitment channels as slow, costly and restrictive with limited flexibility to meet real-time labour needs.
Syed Hussain called for faster, more transparent and demand-driven hiring mechanisms while Lee urged broader recruitment criteria to allow companies to replace workers lost through attrition.
They also stressed the need for clearer policies, streamlined processes and better alignment between enforcement and labour market demands.
As the PRM 2.0 deadline approaches, they said the challenge would be to ensure that repatriation efforts are matched by a workable and predictable labour supply system.
“Long-term success depends on moving towards a stable, transparent and facilitative framework,” Syed Hussain said.
