Additional ‘cooling off’ policy change announced for certain foreign employees

22 Aug 16

MALAYSIA

IMPACT – MEDIUM

What is the change? As a follow-up to last week’s announcement, the Malaysian Digital Economy Corp. (MDEC) has released an additional requirement calling for Category III Employment Pass holders to fulfill a three-month cooling-off period outside of Malaysia.

What does the change mean? Foreign employees applying for a fourth year of a Category III Employment Pass, either as a renewal or as a change of jobs, must exit Malaysia and serve a three-month cooling-off period.

  • Implementation time frame: Sept. 1.
  • Visas/permits affected: Employment Passes (Category III).
  • Who is affected: Foreign nationals working in Malaysia with a Category III Employment Pass and seeking to apply for a fourth year.

Background: Employment Pass Category III covers foreign nationals working in Malaysia for up to one year who are paid below the normal minimum salary of 5,000 ringgits (about US$1,240) per month. This pass is initially valid for one year and may be renewed twice. According to the new rule, at the end of the third year, employers who wish to sponsor the Category III worker for a fourth year must wait until the worker has exited Malaysia and satisfied a 90-day cooling-off period before they may apply.

BAL Analysis: Employers should be aware of the additional change and its impact on business schedules. MDEC authorities are expected to release a circular with further details on all the changes before the Sept. 1 implementation date.

This alert has been provided by the BAL Global Practice group and our network provider located in Malaysia. For additional information, please contact your BAL attorney.

Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@balglobal.com.

Follow us on Twitter: @BAL_Immigration

About Berry Appleman & Leiden LLP
Founded in 1980, Berry Appleman & Leiden (BAL) provides comprehensive global immigration services from seven offices across the U.S. and from offices in Geneva, London, Melbourne, Rio de Janeiro, São Paulo, Shanghai, Singapore and Sydney. BAL manages global visa matters and customized application approaches for work permits, business visas, and residence permits in more than 100 countries. With a single cost center for worldwide operations, BAL offers centralized management with regional and local support for the complete spectrum of global immigration matters.

Source: Berry Appleman & Leiden LLP