AT 21- BACHELOR OF EDUCATION (BUSINESS MANAGEMENT) WITH HONOURS

SEMESTER 2, SESSION 2013/2014

PPB 3153 – Human Resource (Group C)

SCIENTIFIC RESEARCH :

The Employment of Foreign Workers Close Up the Opportunities

Employment for the Local Workers

NAME : NURULSYAKIRIN BINTI RAMLAN

MATRIC NUMBER : D20131064075
LECTURER : PROF. MADYA DR. CHE MOHD ZULKIFLI BIN
CHE OMAR

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 The Employment of Foreign Workers Close Up the Opportunities
Employment for the Local Workers

Nurulsyakirin Ramlan
Universiti Pendidikan Sultan Idris (UPSI)
Tanjong Malim, Malaysia
Abstract

Employment of foreign workers in the employment sector at Malaysia cause a conflict to the
locals workers because many job vacancies were filled by foreign worker from the other
countries who came to Malaysia. This study try to look the effects that occur due to the high
intake of foreign workers in the country. The impact to the position of economy were also
identified to know the effect has been affected from the issue that many foreign workers fill the
jobs in this country. This study also was written to examine either the employment of foreign
workers in the country have an impact on the local population. These results showed the impact
of hire foreign workers to the local workers and appropriate recommendations to overcome the
problem of dumping of foreign workers in Malaysia.

Keyword: Foreign workers, conflict, job vacancies

Abstrak

Pengambilan pekerja asing dalam sektor pekerjaan di Malaysia menjadi satu konflik kepada
penduduk tempatan disebabkan banyak kekosongan pekerjaan telah diisi oleh penduduk negara
lain yang datang ke Malaysia. Kajian ini berusaha untuk melihat kesan-kesan yang berlaku
disebabkan pengambilan pekerja asing yang tinggi di negara ini. Kesan kepada kedudukan
ekonomi negara juga turut dikaji bagi mengetahui pengaruh besar yang dibawa dari isu
pengambilan pekerja asing untuk mengisi kekosongan sektor pekerjaan di negara ini. Kajian ini
juga ditulis untuk melihat sejauh mana pengambilan pekerja asing di negara ini memberi kesan
kepada penduduk tempatan. Hasil kajian ini menunjukkan kesan pengambilan pekerja asing
kepada pekerja tempatan dan cadangan yang sesuai bagi mengatasi masalah lambakan pekerja
asing di Malaysia.

Kata kunci: Pekerja asing, konflik, jawatan kosong

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Introduction

The growing of total foreign workers in Malaysia give many effect to the country and local
population. Foreign workers who come to Malaysia with large quantities cause the limited
employment opportunities to local workers. This has led to the problem of unemployment in the
country of Malaysia is increasing because too many people not working . Standard of living will
decline because they do not have the income to sustain life . The dumping of foreign workers
could also threaten the economy. This is caused when wages earned by migrant workers are sent
to their families who live in their home country , the flow of money out of the high country took
place. If the country of origin of foreign workers employed in Malaysia 's currency value is low,
this will cause the Ringgit Malaysia ( RM ) which is converted told this to the home country
currency value will double. At present, many foreign workers who have become entrepreneurs
has threaten local entrepreneurs to compete with them. It happen because, the value has been
offered by the foreign entrepreneurs more low and cheap.

Policies implemented by the government attract foreign workers come to Malaysia

Government policies in the budget 2014 to increase agricultural chain is also an interesting
policy that caused the foreign workers come into the country. This is because many employers
who want to take advantage of that provided by the government to develop the field by taking
many foreign workers that can be absorbed in their sector with wages lower than the wages of
local workers. Relatively, the rate of wages in Malaysia is cheap did not as promoted, but the
lower is the rate of wages of foreign workers employed in Malaysia.

According to current policy derived from the Interior Ministry, there are some sectors
that are allowed by the government to allow employers hire foreign workers to work in that
sector. The sector that allowed consists of six sectors, namely five of the formal sector which
includes the construction, services, agriculture, farming and manufacturing, while the informal
sector is foreign maids. Although the current policy made by the government even seen only
some sectors are allowed to hire foreign workers, but it can give a huge impact to local workers
because these sectors is the largest employment sector in Malaysia. These sector also have many

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vacancies and work opportunity that can filled with local worker, but the problem is many
employers more prefer to hire foreign workers than local workers.

Until now, there are 15 countries that are allowed to provide a source of foreign workers
into the country of Malaysia. These countries are Nepal, Indonesia, India, Myanmar, Philippines
(men), India, Pakistan, Cambodia, Thailand, Laos, Sri Lanka, Uzbekistan, Turkmenistan,
Kazakhstan and Bangladesh. But Bangladesh is not allowed to work in the agricultural sector.
Employment of foreign policy made by the government caused Malay Contractors Association
Johor (PKMMNJ) urges approval of foreign workers reviewed because four months is too long
for them. This suggests that the attitude of employers underestimate the local unemployment
problem because just a little problem because they thinking only of profits to their sector
(Kosmo, 2013).

According to Rini Sulistiawati (2012), the minimum wage policy implemented in other
countries such as Indonesia has shown a negative relationship to the absorption of labor in their
country. This suggests that policies made by foreign countries are not able to accommodate or
take more labor because wages paid to the workers in their countries should follow the policies
laid down by their country. Due to the policies in place that cannot absorb more labor in their
country, many of the countries who took the opportunity to work in Malaysia because of the
Malaysian currency is higher than their country.

Effects Recruitment of Foreign Workers to Local Workers

According to Asan Ali Golam Hassan (2009) through The Utusan Online, there is a company
registered by local operators, but their activities are actually carried out by foreign operators
where their employees are mainly migrant workers. This statement implies that there are migrant
workers who come into Malaysia entrepreneurs to profit from their enterprise more than double
the if later when they brought back to their country. Recruitment of foreign workers largely also
caused many local workers cannot fill the jobs.

In addition, sub-contractors unregistered foreign operators will compete with small

entrepreneurs, particularly among indigenous entrepreneurs or local entrepreneurs for projects.

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The price offered by cheaper foreign workers will get jobs relatively to sub-contract the effect of
which would be an obstacle jobs that should be filled by local workers. In this case, the employer
should also be aware of the problems faced by local workers and its impact on the country.
Employers can only make money by foreign workers due to low wages without thinking about
the impact on unemployment in the country of Malaysia and the high flow of money in the event
of a change in the foreign currency to be delivered to their home country (Utusan Online, 2009).

Other problem also is the involvement of foreign operators could delay efforts indigenous
involvement in business activities. The problem faced is when business opportunities to local
sub-contractors will be reduced because they could not compete in terms of returns and costs to
be incurred. When local producers cannot or lack of projects, their lack of returns in their
enterprises and to bear the costs despite a variety of projects. As a result, enterprises locals
usually do not survive to continue and compete with other operators, particularly the foreign
operators that offer lower wages.

According to a survey conducted by Syed Abdul Razak Syed Mahadi et al. (2012), many
foreign workers employed in Sabah cared for their survival as in terms of family networks,
placement, and participation in social and political as well as economic viability. Strategies that
make for foreign workers is very profitable for them. As a result, local people should be given a
variety of convenience and profit had been filled by foreign workers employed there. In the
present study indicate that foreign workers are employed as more because more locals are
choosy. This is because wages offered by the employer does not meet their needs. Therefore,
employers should review the action because unemployment that happens in Malaysia will also
slow economic growth which in turn also affects their sector.

Here is the Health Insurance Protection Scheme Foreign Workers (SPIKPA). Exemption for
plantation workers.

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Levy, Visa, PLKS, Process and Deposit

Table 1: Rate of levy payments, PLKS and process according to the sector

LEVI (PA) PL(KS) PROCESS

SECTOR (RM) (RM) (RM)
MANUFACTURING 1,250.00 60.00 125.00
CONSTRUCTION 1,250.00 60.00 125.00
AGRICULTURE 410.00 60.00 125.00
PLANTATION 590.00 60.00 125.00
SERVICES (other than the Island 1,850.00 60.00 125.00
Resort and the Home)
SERVICES (house welfare) 650.00 60.00 125.00
FOREIGN MAID 410.00 60.00 125.00
Source: Department of Immigration Malaysia

Table 2: Rate Visa and Insurance Guarantee by Country

NUMBER CITIZENSHIP VISA (RM) INSURANCE GUARANTE (RM)

1. INDONESIA 15.00 250.00
2. BANGLADESH 20.00 500.00
3. PAKISTAN 20.00 750.00
4. MYANMAR 19.50 750.00
5. INDIA 50.00 750
6. PHILIPPINES 36.00 1000.00
7. THAILAND FREE 250.00
8. CAMBODIA 20.00 250.00
9. NEPAL 20.00 750.00
10. VIETNAM 13.00 1500.00
11. SRI LANKA 15.00 750.00
12. CHINA 30.00 1,500.00
13. LAOS 20.00 1,500.00
Source: Department of Immigration Malaysia

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 Sources and information obtained from the Immigration Department of Malaysia, the
country issue high spending for bear Scheme Foreign Workers Health Insurance Protection
(SPIKPA) that actually the expenditure should be used to accommodate local workers.

In addition, rising migrant workers are also able to increase the amount of unemployment
in Malaysia. Data obtained from the Department of Statistics relating to key labor statistics
Malaysia in January 2014 has increased to 3.3% from the seasonally adjusted unemployment rate
of 3.1% (See appendix). The effect of too many employers who hire foreign workers to work in
their sector caused many local workers who are not gainfully employed and unemployed. If
appropriate action is not taken, the rising unemployment in the next year will bring adverse
effects to the country.

Government actions to control the intake of foreign workers

In order to control the intake of foreign workers who flooded the country, the government has
determined there are certain sectors are allowed to hire foreign workers to work in the sector
operators. This can restrict certain sectors of foreign workers as their employees because there
are certain sectors in Malaysia require a skilled labor force and experience can be an opportunity
for many local residents have now been educated. In addition, the government also controls the
setting of certain countries are allowed to be employed by the employer in the country. This can
help blocking the recruitment of a diverse country that can cause too many foreign workers from
various countries who will enter and take jobs that should be filled by local workers or natives.

Ministry of Interior has set various rules and regulations for employers who want to hire
foreign workers to work in their sector. The age limit prescribed for the employment of foreign
workers in Malaysia is 18 years to 45 years. Minimum age refers to the age of the first time for
the entry of foreign workers into Malaysia. The age limit for this other than to restrict and
regulate the entry of foreign workers into the country, but the age limit is also to safeguard the
quality of the production and output of the sectors they are involved. If the age of foreign
workers employed is not limited and defined, there are foreign workers over age limit their
ability to work to enter the sectors in Malaysia that will affect production and production of

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certain sectors. Consequently the employer should bear the burden of the high cost of their
dependents, but the results of such poor quality.

Moreover, fixing the length of employment for migrant workers are also among the
actions to control the recruitment and participation of migrant workers in Malaysia. The period
of employment is allowed is 5 years + 5 years to 5 formal sector and the informal sector are no
limits on the length of employment set by them. Length of employment of foreign workers, an
employer can avoid over-reliance on foreign workers to fill forever job opportunities in their
respective sectors. In addition, this setting can prevent migrant workers is too old to be in
Malaysia to be seen as a citizen himself. Applicants who only have to meet the conditions and
criteria set by the Regulatory Agency to be approved.

According to a paper made by Mohamad Fauzi Sukimi and Muhd Ridhwan Sarifin
(2014), employers are required to notify the vacancies required depress the Department of Labor
former employees to search for local registered people preferred to fill the vacancies. In addition,
the number of foreign workers approved for employment is based on their quota by sector by
OSC. By using these methods or procedures, employers cannot whim to take too many foreign
workers in their sector due to lower wage rates.

The laws that relating to the employment of foreign workers that made by the
government is the government's efforts to regulate the entry of foreign workers into Malaysia. To
overcome problem about the dumping of foreign workers, the details about the foreign workers
that hired by employers should be informed to the Labor Department of Peninsular Malaysia .
This is the conditions set by the government in the Employment Act 1955 Section 60K that to
ensure that employers comply with the policies and decisions of the government on foreign
workers (Mohamad Fauzi Sukimi and Muhd Ridhwan Sarifin, 2014). Rules set by the
government is able to establish justice to the foreign workers with local workers and, and more
important is to ensure local jobs are not threatened by the presence of foreign workers.

According Mohamad Fauzi Sukimi and Muhd Ridhwan Sarifin (2014), the government
has introduced 6P (Registration, Whitening, Amnesty, Enforcement and Eviction) to control
foreign workers, especially illegal foreign workers who do not have documents. There are 6
stages in their programs. Among them is the last stage of the eviction. As the cost of the eviction

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process is incurred by the government, each of illegal immigrants will be on the black list to seek
permission to enter Malaysia again. This is not only able to control the entry of foreign workers
registered or not, but also save on the costs incurred by the government to deal with the problems
of illegal immigrants in Malaysia.

In this study, the Special Programme of Management Illegal Immigrants have been
implemented by the government also the way to reduce the number of illegal immigrants to
Malaysia. In the way to perform this programme, if the arrest and deportation of immigrants who
do not have valid documents or expired visa has been made, the parties involved should ensure
that laws are complied with. The programme also to ensure public safety and security of
Malaysia can controlled more easy. The issue of employers who have been cheated during the
ongoing 6P programme (Registration, Whitening, Amnesty, Enforcement and Eviction) can be
refer to The Special Programme of Management Illegal Immigrants (Mohamad Fauzi Sukimi
dan Muhd Ridhwan Sarifin, 2014).

Recommendations to overcome the dumping of foreign workers in Malaysia

Among the recommendations that can be implemented to overcome the dumping of foreign
workers in Malaysia is monitor the position of immigrants after the expiry of the visa. To
overcome issues related to foreign workers, monitoring their position in Malaysia either expired
visa or not should be implemented. This is to ensure that they do not work in Malaysia exceeded
the time limit set. There are some employers who do not care about the length of time the
employment of foreign workers is due to monitoring is rarely done. Therefore, the parties
involved should be actively involved in monitoring to ensure that foreign workers employed in
Malaysia to comply with regulations.

Referring the Berita Harian (2014), National Association of Employment Agencies of

Malaysia (PIKAP), Datuk Zulkepley Dahlan stated that the managing agents of foreign workers
should not stopped to overcome the dumping of illegal immigrants, but enforcement against
unregistered agencies should streamlined. This is because the actual causes of the influx of
foreign workers in Malaysia are caused by illegal agents and unregistered agencies pursue profits
by managing the entry of foreign workers to take hold and there is fraud.

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 Besides that, in terms of monitoring a condition of granting a permit to tighten social visit
is the best way to resolve the dumping of foreign workers brought into Malaysia illegally or
without permits. This means, do not allow foreigners who do not have a return flight ticket to get
a permit social visit upon arrival. The proposal to recruit foreign workers taken over entirely by
government agencies without involving agents are the suggestions given by the President of the
Malaysian Trades Union Congress (MTUC), Mohd Khalid Atan (Straits Times, 2014).

In addressing the problems of migrant workers, the parties that should care about this
problem is the employer. Employers should have a sense of responsibility in helping the
government to overcome the problem of dumping of foreign workers in Malaysia to cover jobs
for local workers. The attitude of employers who prefers to get the high profit should be removed
because this attitude brings a lot of harm to the local people and thus can be detrimental to the
level of unemployment in Malaysia especially to local workers. Employers should prioritize
hiring local workers to fill the job vacancies in the sector. Attitude of some employers to hire
foreign workers without valid documents also need to be addressed. If employers more
accountable in hiring the workers, the problem of dumping of foreign workers in Malaysia can
also be overcome.

In addition, the government should increase the fines imposed on the parties involved in
the problems of foreign workers. Foreign workers in Malaysia without valid documents should
be taken more decisive action other than transmission or their expulsion to their country of
origin. For example, those who come to Malaysia without valid documents can be subject to suit
as pay fines to give them a lesson before they are blacklisted so cannot re-enter Malaysia. This is
to tighten the entry of foreign residents in the country so that they do not consider our country
has a weak regulatory system in controlling bladder control. Employers actually be the cause of
the problem should also be given action and heavy penalties for their instruction.

Other suggestions to overcome the problem of dumping of foreign workers in Malaysia

are to determine the need of the labor force is insufficient (Che Hashim Hassan, 2009). The
government must make an estimate of labor requirements needed in each sector. Then, the
government will need to determine the number of foreign workers can be employed in the sector,
giving priority to local workers. The proposal is to reduce dumping foreign workers in Malaysia
because of the number of foreign workers employed will be allowed to set.

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Conclusion

In conclusion, the intake of foreign workers in Malaysia is not controlled and well managed had
been blocked employment opportunities for local residents. Dumping of foreign workers coming
to Malaysia also provide competition to the locals as most of the foreign workers offer prices
cheaper wages. Unemployment in Malaysia has also increased due to the many local residents
who do not have jobs, especially people who not have a higher education because jobs were
filled by foreign workers. Thus, the variety of ways that have been implemented by the
government to solve the problem of dumping of foreign workers and there are many proposals or
measures that can be taken to overcome the problem of dumping of foreign workers in Malaysia.

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Asan Ali Golam Hassan (2009). Displacement of Foreign Labor Economics. Utusan Online. 16
Jun 2009.
Che Hashim Hassan (2009). Foreign Labor in Malaysia: Trends, Methods, Problems and Ways
Overcome
Jabatan Imigresen Malaysia. Application of Foreign Workers.
Jabatan Perangkaan Malaysia.
Kementerian Dalam Negeri. During the Employment of Foreign Workers Policy.
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penggajian-pekerja-asing.
Kosmo (2013). Kesatuan Review Want Government Contractor Recruitment Period
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Luqman Arif Abdul Karim (2014). Cost Burden of Administration. Berita Harian, 16/1/2014.
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Malaysia.
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