Human resource management in Malaysia focusing on foreign worker current issues.

1. TOPIC: HUMAN RESOURCE
MANAGEMENT IN MALAYSIA
NAME: MOHAMED ABDI MOHAMED
ID: 09111500008
INTAKE: NOVEMBER
SUBJECT: HRM
LECTURER: MS. KARTHIKA

2. INTRODUCTION
A function of management, concerned with hiring, motivating and maintaining
people in an organisation. It focuses on people in the organisation.
“The real source of competitive leverage, are the culture and capabilities of
your organization that derive from how you manage your people”
David A. Decenzo and Stephen P. Robbins, 2007.
Today, HR plays a role of the important business partner, which has a
significant impact on the business performance. Human Resources do not
support business functions, but it takes over the ownership and leadership of
change management projects. HR introduces policies and practices focused
on the increase of the performance of employees, maintaining the high level
of employees’ satisfaction, and designing the unique corporate culture. HR
leads and manages projects resulting in building the competitive advantage.
FUNCTIONS OF HR DEPARTMENT
The goal of a human resource manager is to strengthen the employer-
employee relationship. This goal is supported by a variety of functions within
the human resources department and throughout the organization. In a small
business, the human resource manager may have a great degree of latitude,
as well as the time to devote to employee interaction with a small workforce.
Both of these are key elements of an effective human resources leader,
although she must accomplish a number of functions to achieve this goal.
 Recruitment
The success of recruiters and employment specialists generally is measured
by the number of positions they fill and the time it takes to fill those positions.

3. Recruiters who work in-house -- as opposed to companies that provide
recruiting and staffing services -- play a key role in developing the employer's
workforce. They advertise job postings, source candidates, screen
applicants, conduct preliminary interviews and coordinate hiring efforts with
managers responsible for making the final selection of candidates.
 Safety
Workplace safety is an important factor. Under the Occupational Safety and
Health Act of 1970, employers have an obligation to provide a safe working
environment for employees. One of the main functions of HR is to support
workplace safety training and maintain federally mandated logs for workplace
injury and fatality reporting. In addition, HR safety and risk specialists often
work closely with HR benefits specialists to manage the company's workers
compensation issues.
 Employee Relations
In a unionized work environment, the employee and labour relations
functions of HR may be combined and handled by one specialist or be
entirely separate functions managed by two HR specialists with specific
expertise in each area. Employee relations are the HR discipline concerned
with strengthening the employer-employee relationship through measuring
job satisfaction, employee engagement and resolving workplace conflict.
Labour relations functions may include developing management response to
union organizing campaigns, negotiating collective bargaining agreements
and rendering interpretations of labour union contract issues.
 Compensation and Benefits
Like employee and labour relations, the compensation and benefits functions
of HR often can be handled by one HR specialist with dual expertise. On the

4. compensation side, the HR functions include setting compensation structures
and evaluating competitive pay practices. A comp and benefits specialist also
may negotiate group health coverage rates with insurers and coordinate
activities with the retirement savings fund administrator. Payroll can be a
component of the compensation and benefits section of HR; however, in
many cases, employers outsource such administrative functions as payroll.
 Compliance
Compliance with labour and employment laws is a critical HR function.
Noncompliance can result in workplace complaints based on unfair
employment practices, unsafe working conditions and general dissatisfaction
with working conditions that can affect productivity and ultimately, profitability.
HR staff must be aware of federal and state employment laws such as Title
VII of the Civil Rights Act, the Fair Labour Standards Act, the National Labour
Relations Act and many other rules and regulations.
 Training and Development
Employers must provide employees with the tools necessary for their
success which, in many cases, means giving new employees extensive
orientation training to help them transition into a new organizational culture.
Many HR departments also provide leadership training and professional
development. Leadership training may be required of newly hired and
promoted supervisors and managers on topics such as performance
management and how to handle employee relations matters at the
department level. Professional development opportunities are for employees
looking for promotional opportunities or employees who want to achieve
personal goals such as finishing a college degree. Programs such as tuition
assistance and tuition reimbursement programs often are within the purview
of the HR training and development area.

5. Governing body of HR in Malaysia (MOHR)
The Ministry of Human Resources ( MOHR) headed by Datuk Richard Riot Jaem.
The ministry is responsible for skills development, labour, occupational safety
and health, trade unions, industrial relations, industrial court, labour market
information and analysis, social security.
MOHR consists of many different departments such as:
- Department of skills and development
- Department of labour peninsular Malaysia, Sabah, and Sarawak
- Department of occupational safety and health
- Department of Trade Unions Affairs
- Department of Industrial Relations
MOHR Roles and Responsibilities
 Update and implement labour policies and laws to create efficient,
productive and discipline workforce with positive values and good
work ethics.
 Update and implement occupational safety and health policies and
laws.
 Efficiently manage and independently resolve industrial dispute
between employer and employee in order to create a conducive work
environment.
 Monitor and facilitate development and movement of trade unions to
be orderly for the benefit of the nation.
 manage international relations in Labour Management field, technical
co-operation
In labour related matters and human resources development.
 Create job opportunities and job placement.

6. MOHR policies
Labour environment and employment trend is forever changing due to
domestic and also global influence. Creating, establishing and maintaining
job opportunities in conducive investment climate is important in ensuring
healthy working environment and thus benefits the manpower. Improving
working environment through efficient management will contribute to the
realization of decent work for employees.
Core values that are imparted and uphold by the citizens of MOHR towards
achieving the vision are:
1. Justice and Fairness
To appreciate and practice principle of justice and fairness to uphold
social justice for the wellbeing of all
2. Harmonious
To ensure harmonious industrial relations among employers,
employees and trade unions for the development of the nation and
well-being of the citizens
3. Tripartisme
To ensure close relationship in formulating and implementing policies,
laws and regulations for the benefit of all
4. Well-being and Safety
To practice safety and health in a workplace to ensure a conducive
and productive workplace
5. Continuous Learning
To place importance on continuous learning through training and skills
upgrading to ensure employability of competent and competitive
workforce

7. 6. Caring
To provide social security protection for well-being of employee,
family, society and country
Foreign workers and levy
The Government of Malaysia has approved certain sectors and countries
from where such manpower can be recruited.
There is an annual levy that the employer needs to pay when they hire the
foreign workers.
Costing fees depends upon each sector. Some important factors that you
need to keep on your check list are as under:
o The minimum pax per application should be 10 and maximum 300
o Minimum paid up capital must be RM250,000.00
o Basic salary of workers needs to be at least RM900 per month
o No need of for medical check-up (FOREMA)
o No endorsement work permit
o No need to pay levy fees
o The work permit process completion should be within 1 month
o Blank Company letterhead for each foreign worker
o EPF & SOCSO statement (for latest 3 months)
o Fees of RM500.00 for 2 years approval work permit (fee include work
permit and visa cost)

8. Generally, an annual levy on foreign workers as per Government rule is
imposed as follows:
Approved sector Fees
Manufacturing RM1,250
Construction RM1,250
Plantation RM 590
Agricultural RM 410
Domestic Help RM 410
Welfare Home RM 600
Island Resort RM 1,200
Others RM 1,850
Current issues
According to The Star Online the government has announced the new LEVY
for foreign workers.
From the report Employers in the manufacturing, construction and services
sectors will have to pay a levy of RM1, 850 for each foreign worker hired.
Plantations and agriculture sector employers will have to pay RM640 per
worker.
Home Ministry secretary-general Datuk Seri Alwi Ibrahim said the decision on
the new rates entailed an increase of RM600 for category one and RM230
and RM50 for the plantations and agriculture sectors the new rates was
made by the Cabinet for Peninsular Malaysia only.
From this report we can conclude that imposing such policies will force the
employers to turn to hiring Malaysians instead of foreign workers due to
increase in the overall cost of employment which at the end give a negative
impact on the opportunity of the foreign workers employability.

9. References
ANIS,M. N.(2016, March 18). Newforeign workerlevies for PeninsularMalaysia effective
today.Retrieved2017, fromThe Star Online:
http://www.thestar.com.my/news/nation/2016/03/18/foreign-worker-levies-
penisular-malaysia/
ForeignWorkerAgencyMalaysia.(2017). Payment–What The EmploymentOf Foreign
WorkersInvolves.Retrieved2017, fromForeignWorkerMalaysia:
http://www.foreignworkermalaysia.com/levy/
JabatanImigresenMalaysia.(2016, December30). Foreign Worker.Retrieved2016, from
Official Portal of ImmigrationDepartmentof Malaysia:
http://www.imi.gov.my/index.php/en/main-services/foreign-workers.html
SPYKERMAN,N.(2017, January 3). No levy on foreign workers.Retrieved2017, fromThe
Star Online:http://www.thestar.com.my/news/nation/2017/01/03/no-levy-on-
foreign-workers-reverse-new-regulations-on-migrant-employees-say-business-
owners/