PETALING JAYA: Placing foreign worker management fully under the Human Resources Ministry has been described as a long-awaited reform to streamline the hiring process.
The Federation of Malaysian Manufacturing (FMM) welcomed the Cabinet decision that took effect on July 6, where foreign worker quota applications are exclusively submitted through the eQuota module of the Foreign Workers Centralised Management System (FWCMS), replacing manual case-by-case processing.
FMM said it had consistently called for a single, transparent digital platform to manage foreign worker recruitment, as fragmented approval processes involving multiple agencies had created unnecessary costs, delays and uncertainty for manufacturers, especially small and medium enterprises.
"Consolidating quota processing under a single ministry and a single digital platform directly addresses these long-standing concerns," they said in a statement on Tuesday (July 7).
FMM urged the ministry to ensure the transition is supported by clear operational guidelines, sufficient system capacity, real-time application tracking, standardised requirements and effective channels for resolving issues.
They added that while the Home Ministry would continue to oversee national security-related matters, the new arrangement would provide greater clarity in the operational management of foreign workers.
The federation also called on the government to use the new system as a foundation to implement the Multi-Tier Levy Mechanism (MTLM), which they said would provide a more demand-driven approach to foreign labour management.
They said MTLM should replace rigid quotas and sectoral ratios with a structured levy system that allows companies to hire based on genuine operational needs while encouraging automation and reducing long-term dependence on foreign workers.
Under the proposed mechanism, companies with lower foreign worker dependency, such as those maintaining foreign workers at 10% to 15% of their workforce, could be considered for preferential levy rates, while higher dependency levels could attract progressively higher levies based on a transparent formula.
"Levy proceeds should be channelled towards automation, workforce development and productivity support, particularly for small and medium enterprises.
"MTLM should serve as an economic and industrial transition tool, rather than a rigid barrier to labour access," they said.
