FMM urges smooth transition to new foreign worker system, pushes for multi-tier levy mechanism

July 08, 2026

Head Office, KL

FMM In The News: THE EDGE MALAYSIA, July 7, 2026

KUALA LUMPUR (July 7): The Federation of Malaysian Manufacturing (FMM) has urged the Ministry of Human Resources to ensure a smooth transition to the newly centralised foreign worker management system while using the platform to implement the multi-tier levy mechanism (MTLM).

FMM president Jacob Lee Chor Kok said the transition should be supported by clear operational guidelines, sufficient system capacity to handle application volumes and continuous engagement with industry associations to prevent new bottlenecks.

He also stressed that future improvements to the digital recruitment ecosystem should build upon, rather than duplicate, the newly consolidated Foreign Workers Centralised Management System (FWCMS)/eQuota single-window platform.

Lee said the consolidation of foreign worker quota processing under the Human Resources Ministry provides the ideal opportunity to operationalise the MTLM, which the FMM has consistently called on the government to implement without further delay.

“We have long maintained that the MTLM should replace rigid administrative caps and sectoral ratios with a structured, demand-driven approach, allowing companies to hire based on genuine operational need, with tiered levies calibrated to incentivise automation and reduce dependency on foreign labour,” he said in a statement on Tuesday.

Under the FMM’s proposal, companies with foreign workers of no more than 10% to 15% of their workforce should be considered for preferential levy rates, potentially below the current RM1,850 rate, while firms with higher dependency may pay progressively higher levies under a transparent formula with adequate advance notice.

He said the mechanism must recognise that labour transformation cannot be applied uniformly across all industries, particularly export-oriented manufacturing, where operational and semi-skilled workers remain essential.

“The MTLM should serve as an economic and industrial transition tool rather than a restrictive labour access policy, with levy proceeds channelled into automation, workforce development and productivity support, particularly for small and medium enterprises,” he said.

On July 1, the Cabinet decided to place the one-stop centre for foreign worker management fully under the Human Resources Ministry, taking effect on July 6.

Under the new system, all foreign worker quota applications must be submitted exclusively through the eQuota module of the FWCMS, and manual case-by-case processing has been discontinued.

Welcoming the move, the FMM described it as a long-awaited reform that would streamline Malaysia’s foreign worker recruitment process and address long-standing concerns over fragmented approval procedures involving multiple agencies.

The federation also expressed its commitment to continue working closely with the Human Resources Ministry and relevant agencies to ensure the reform is implemented effectively while constructively addressing the issues affecting manufacturers’ access to foreign workers.

Source: https://theedgemalaysia.com/node/809664