Recently in July 2026, the Human Resources Minister reminded employers that job opportunities should first be offered to Malaysians before companies turn to foreign workers. At the same time, the Government is also looking at ways to streamline foreign worker applications, especially for sectors facing urgent manpower needs.(Source: The Star)

For employers, this message should be read carefully.

It does not mean companies cannot hire foreign workers. Many industries in Malaysia still depend on foreign manpower, such as manufacturing, construction, plantation, agriculture, cleaning, security, logistics, F&B and selected services. Some roles are difficult to fill locally. Some work is physically demanding. Some locations are not attractive to local applicants.

But the policy direction is clear: foreign worker hiring must be properly justified, properly documented and responsibly managed.

From an HR perspective, the issue is no longer simply, “Can we get quota approval?” The better question is: “Can we show why foreign workers are genuinely needed, and can we prove that the company has managed the process lawfully and responsibly?”

Foreign Worker Hiring Is Not Just an Operations Request

In many organisations, the request begins with Operations. Production needs more workers. The restaurant needs kitchen crew. The warehouse needs loaders. The cleaning contract needs manpower. Operations sends the headcount request, and HR is expected to “process the foreign workers”.

That approach is no longer enough. Foreign worker hiring now touches manpower planning, local recruitment, immigration compliance, labour law, accommodation, wage payment, recruitment costs, welfare, grievance handling and reputational risk.

HR should not only enter the picture after the business has already decided. HR should be involved before the application is made.

The first question HR should ask is practical:

“What manpower problem are we trying to solve?” Is there a genuine shortage of local workers? Is the wage uncompetitive? Is the job scope unattractive? Is the work location difficult? Is turnover high because of working conditions? Has the company made serious local recruitment efforts, or are we moving to foreign workers because it is administratively easier?

These questions matter because foreign worker hiring should not become a shortcut to avoid fixing deeper workforce issues.

“Local Hiring First” Means Evidence, Not Slogans

“Local hiring first” does not mean every vacancy must be filled by a Malaysian regardless of suitability.

It means employers should be able to show reasonable efforts to offer jobs to local workers before relying on foreign labour. For HR, this comes down to documentation.

If vacancies were advertised, keep the advertisement records. If local candidates applied but were unsuitable, record the reasons. If candidates failed to attend interviews, keep the interview log. If candidates rejected the role due to shift hours, location, salary, job scope or physical demands, record it properly. The company does not need to prepare a complicated legal file for every vacancy. But it should be able to tell a clear story:

“We needed manpower. We tried to hire locally. The response was insufficient or unsuitable. The role remains operationally necessary. Therefore, foreign worker hiring is justified.”

That is much stronger than simply saying, “No locals want this job.” In HR and IR, assumptions are weak. Records are stronger.

Section 60K: Prior Approval Is a Legal Requirement

Employers should also remember that foreign worker hiring is not only an immigration matter. It is also an employment law matter.

Under Section 60K of the Employment Act 1955, employers are required to obtain prior approval from the Director General before employing foreign employees. JTKSM has also stated that this requirement applies before employers employ new non-citizen employees. (Source: Foreign Workers Employment)

This is important because some employers still focus mainly on work permits, quotas and agents, but overlook the labour compliance side of the process.

A valid pass or permit does not automatically mean the employer has complied with every employment law obligation. HR should keep proper records of the approval documents, employee details, employment contracts, wage records, deductions, accommodation information, insurance, permit validity, renewal timelines and exit arrangements.

In simple terms, if the company hires foreign workers, HR must be able to show the full compliance trail.

The Bigger Risk Often Starts After the Worker Arrives

Many foreign worker issues do not happen at the application stage. They happen after the worker arrives.

The job is not ready. The wages are different from what the worker expected. Accommodation is overcrowded. Deductions are unclear. Passports are held without proper basis. Overtime is excessive. The agent promised one thing, but the company says another.

When this happens, the issue is no longer just a manpower problem. It may become a labour complaint, enforcement issue, forced labour concern, buyer audit issue, embassy complaint or reputational risk.

This is why HR must manage the full employment cycle and not only recruitment.

That means proper onboarding, clear contracts, lawful wage payment, compliant accommodation, accessible grievance channels, supervisor briefing, proper discipline process and clean exit management. Foreign workers are employees. They are not just headcount.

Accommodation and Welfare Must Be Planned Early

For employers providing accommodation, Act 446 remains an important compliance area.

JTKSM enforces the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990, which applies in Peninsular Malaysia and the Federal Territory of Labuan. Employers who provide accommodation must ensure that housing, facilities and amenities meet the required standards.

This should not be treated as a last-minute facilities issue.

Before workers arrive, HR should already know where they will stay, whether the accommodation is compliant, how transport will be arranged, who will manage complaints, and who will check the living conditions. (Interesting read: Immigration raid uncovers filthy, overcrowded workers' hostel in Port Klang)

If the answer is “the agent will handle it”, HR should be careful. The employer remains exposed if the arrangement is poor.

Recruitment Fees and Debt Risk: HR Must Ask More Questions

Another area HR should watch closely is recruitment cost.

The International Labour Organization (ILO) has consistently highlighted fair recruitment concerns, including deception about job conditions, illegal deductions, passport retention, recruitment debt and debt bondage.

For employers, it is no longer enough to say, “We did not charge the worker.”

HR should ask:

• Who recruited the worker?

• Was the agent properly licensed?

• What was promised to the worker?

• What costs did the worker pay?

• Was the contract explained in a language the worker understands?

• Does the actual job, wage and accommodation match what was represented?

If a worker arrives heavily indebted because of recruitment fees, the employment relationship begins with risk. (ILO: Fair Recruitment Initiative)

For companies supplying multinational buyers, this is even more important. Many buyers now assess labour practices through ESG, responsible sourcing, SMETA, RBA or internal audit standards. Foreign worker recruitment can easily become a supply chain issue, not just an HR issue.

Practical HR Checklist Before Applying

Before supporting a foreign worker application, HR should prepare a simple manpower justification pack.

It should cover:

1. Business reason for the manpower request;

2. Number of workers required and why;

3. Department, role and job scope involved;

4. Evidence of local recruitment efforts;

5. Reasons local hiring was unsuccessful or insufficient;

6. Current vacancy, turnover and headcount data;

7. Confirmation that wages comply with applicable law;

8. Accommodation readiness, where applicable;

9. Agent or recruitment partner details;

10. Onboarding and deployment plan;

11. Complaint and welfare channel; and

12. Renewal, repatriation and exit plan.

This does not need to be overly complicated. But it must be clear enough for management, auditors or regulators to understand why the company genuinely needs foreign workers and how the company intends to manage them responsibly.

Closing Thought

Foreign worker hiring will continue to be necessary for many Malaysian employers. Business reality cannot be ignored, but the way employers manage foreign worker hiring must improve.

The Government’s “local hiring first” reminder should be treated as more than a policy statement. It is a signal that employers must be able to justify why foreign labour is needed and show that recruitment and employment arrangements are properly managed.

For HR, the role is clear. Do not wait for complaints, enforcement or audit findings.

Build the file now. Clean up the process now. Check the accommodation now. Train the supervisors now. In today’s HR and IR environment, the question is not only whether the company can hire foreign workers. The question is whether the company can defend how and why it did so.