Hiring foreign talent in Malaysia is getting harder. The government just overhauled the Employment Pass rules.
If you ignore the June 1 salary hikes or the new succession plans, your applications will fail. You will waste weeks of time and lose top candidates.
We broke down the exact steps you need to take right now. Follow this checklist to clear the new hurdles and get your team working.
What Changes for Foreign Hiring in Malaysia in 2026?
The Expatriate Services Division (ESD) has drawn a hard line. The new expatriate salary policy protects local talent first.
Compliance is no longer just basic paperwork. It requires strategic financial planning.
Step 1: Clear the MYFutureJobs Labor Market Test
You cannot look abroad until you prove you tried to hire locally. The government enforces a strict 30-day advertisement rule.
You must post the vacancy on MYFutureJobs. You have to interview local talent. Keep clear records of why Malaysian applicants were not selected.
Step 2: Secure Your Section 60K Approval
You need permission from the Director-General of Labour before bringing anyone in. This happens through the ePPAx online system.
The authorities will check your compliance with labor laws and minimum wage. Keep your records clean to secure this foundational approval.
Step 3: Master the June 2026 Employment Pass (EP) Salary Hikes
The June 1 deadline is the biggest hurdle this year. The basic salary thresholds for Category I, Category II, and Category III are jumping significantly.
Budget for these new levels immediately.
| EP Category | 2025 Basic Salary | June 2026 Basic Salary | Succession Plan Required? |
| Category I | RM10,000 | RM20,000+ | No |
| Category II | RM5,000 to RM9,999 | RM10,000 to RM19,999 | Yes |
| Category III | RM3,000 to RM4,999 | RM5,000 to RM9,999 | Yes |
Category II and III Roles Need a Succession Plan
Higher salaries are just one part of the equation. Hiring for mid-level roles now requires a formal succession plan.
You must prove you are transferring skills to local talent. This ties directly into the 1:3 Internship Policy to ensure Malaysians eventually step into these roles.
Step 4: Update Payroll for EPF and SOCSO
Payroll compliance is tighter than ever. Non-Malaysian employees must register for the mandatory EPF contribution.
The employer rate sits at 2%. You also need to enroll them in SOCSO for injury protection. Double-check your systems before their first payday.
Step 5: Finalize Visas and FOMEMA Medical Checks
Once approved, your hire needs a Visa With Reference from the Malaysian Consulate. But the process continues after they land.
They must pass a FOMEMA medical screening. Only then will the Immigration Department issue the PLKS or final Employment Pass.
Frequently Asked Questions (FAQ)
When do the new Malaysia Employment Pass salary rules start?
The revised expatriate salary policy takes effect on June 1, 2026. Any new or renewal Employment Pass application submitted on or after this exact date must meet the newly increased thresholds. Complete applications submitted prior to June 1 remain under the old rules. Plan your renewals carefully to avoid rejected passes.
What is the minimum salary for a Category 1 Employment Pass in 2026?
Effective June 1, 2026, the minimum basic salary for a Category I Employment Pass in Malaysia is RM20,000 per month. This massive increase from the previous RM10,000 requirement reflects the push for highly specialized global talent. These premium passes remain valid for up to 10 years.
Do I need a succession plan to hire foreign workers in Malaysia?
Yes. Starting June 2026, employers must submit a formal succession plan when applying for Category II and Category III Employment Passes. The government heavily enforces this mandate. You must actively transfer critical skills to local Malaysian talent to retain your foreign hiring privileges over time.
Do foreign workers in Malaysia pay EPF?
Yes. Non-Malaysian employees must legally register with the Employees Provident Fund (EPF). The current mandatory minimum contribution rate is 2% from the employer and 2% from the employee. This rule ensures baseline financial protection for international workers during their tenure in the country.
What is the MYFutureJobs requirement for hiring expats?
Before hiring a foreign professional, employers must advertise the specific vacancy on the MYFutureJobs portal for at least 30 days. You must formally interview local candidates first. The authorities require exact documentation explaining why a Malaysian applicant was not suitable for the role before granting foreign approvals.
