[Malaysia] New expatriate salary framework coming into effect June 1

In Malaysia, the government has announced a comprehensive overhaul of its expatriate employment policy to strike a balance between local talent development and global competitiveness, Human Resources Online reports.

From June 1, 2026, the new framework restructures salary rates for Category I, II and III Employment Pass holders and introduces defined employment periods. 

The policy reportedly builds upon the existing framework established after the Economic Council Meeting on 20 December 2016 and reflects extensive consultations with industry stakeholders conducted since 2022.

The policy, aligned with the MADANI principles and the 13th Malaysia Plan, aims to reduce reliance on foreign labour and prioritise qualified, local talent to fill job vacancies before considering hiring expatriates.

The upcoming expatriate employment policy will reportedly include:

Increased salary ranges

• Monthly salaries of Category I Employment Pass expatriates will increase from RM10,000 and above to RM20,000 and above.

• Salaries of Category II Employment Pass expatriates will increase from RM5,000 – RM9,999 to RM10,000 – RM19,999 monthly.

• Salaries of Category III Employment Pass expatriates will increase from RM3,000 – RM4,999 to RM5,000 – RM9,999 monthly, except for the manufacturing and manufacturing-related services (MRS) sectors, which are set at RM7,000 – RM9,999 monthly.

It sets out the following employment period details:

• The employment period of the Category I Employment Pass will be set at 10 years.

• The employment period for the Category II Employment Pass is set at 10 years with a succession plan.

• The employment period for the Category III Employment Pass is set at five years with a succession plan.

• All expatriates holding Category I, II and III Employment Passes are permitted to bring dependents.

The Ministry of Home Affairs (KDN) will schedule a closed-door meeting before fully implementing the policy. KDN will also have stakeholder engagement sessions, including industry, employers and related agencies, to explain the implementation process, outline policy implications, and provide guidance to ensure a smooth transition that safeguards business continuity.

The ministry stated that it will "continue to ensure that every policy reform is implemented in a phased, balanced, and nationally based manner, to ensure sustainable economic growth and the development of local human capital in the long term."

Source: Human Resources Online

(Link and quotes via original reporting)

In Malaysia, the government has announced a comprehensive overhaul of its expatriate employment policy to strike a balance between local talent development and global competitiveness, Human Resources Online reports.

From June 1, 2026, the new framework restructures salary rates for Category I, II and III Employment Pass holders and introduces defined employment periods. 

The policy reportedly builds upon the existing framework established after the Economic Council Meeting on 20 December 2016 and reflects extensive consultations with industry stakeholders conducted since 2022.

The policy, aligned with the MADANI principles and the 13th Malaysia Plan, aims to reduce reliance on foreign labour and prioritise qualified, local talent to fill job vacancies before considering hiring expatriates.

The upcoming expatriate employment policy will reportedly include:

Increased salary ranges

• Monthly salaries of Category I Employment Pass expatriates will increase from RM10,000 and above to RM20,000 and above.

• Salaries of Category II Employment Pass expatriates will increase from RM5,000 – RM9,999 to RM10,000 – RM19,999 monthly.

• Salaries of Category III Employment Pass expatriates will increase from RM3,000 – RM4,999 to RM5,000 – RM9,999 monthly, except for the manufacturing and manufacturing-related services (MRS) sectors, which are set at RM7,000 – RM9,999 monthly.

It sets out the following employment period details:

• The employment period of the Category I Employment Pass will be set at 10 years.

• The employment period for the Category II Employment Pass is set at 10 years with a succession plan.

• The employment period for the Category III Employment Pass is set at five years with a succession plan.

• All expatriates holding Category I, II and III Employment Passes are permitted to bring dependents.

The Ministry of Home Affairs (KDN) will schedule a closed-door meeting before fully implementing the policy. KDN will also have stakeholder engagement sessions, including industry, employers and related agencies, to explain the implementation process, outline policy implications, and provide guidance to ensure a smooth transition that safeguards business continuity.

The ministry stated that it will "continue to ensure that every policy reform is implemented in a phased, balanced, and nationally based manner, to ensure sustainable economic growth and the development of local human capital in the long term."

Source: Human Resources Online

(Link and quotes via original reporting)