Malaysia’s new expat salary rules dubbed ‘ridiculous’, stoking fears of talent drain

An effort to prod Malaysian employers into hiring more locals for white-collar jobs by doubling the minimum salary for foreign staff has caught expatriates cold and stirred anxiety among some firms over a reduced labour talent pool.From June, the salary threshold for expatriate Employment Pass (EP) holders will be substantially raised as the Ministry of Home Affairs tries to reduce reliance on foreign labour and open pathways to work for its own citizens who are plagued by low wages and shrinking opportunities.Under the policy, employers will each month need to pay non-local senior managers US$4,940, up from US$2,470, and skilled workers a doubled rate of US$2,470.For some hires, employers will also have to show how they plan to eventually transition the expatriate-held roles to Malaysians.Discussed since last year, the move has still stunned many foreign workers and businesses reliant on them.The policy is “ridiculous and unacceptable”, a French expatriate based in Malaysia for 15 years told This Week in Asia, requesting anonymity.