The ministry said this is intended to provide flexibility for industries to adjust their labour needs without affecting the government’s objective of reducing dependence on foreign workers, Bernama reported.
“Taking into account various factors and feedback from the industries, the suspension of the 80:20 policy compliance will continue until the full implementation of MTLM,” it said in a statement.
The 80:20 policy refers to the employment condition that mandates a ratio of 80% local workers and 20% foreign workers in certain sectors, especially in manufacturing.
The MTLM is an incentive for employers to reduce dependence on foreign workers and increase the hiring of local workers, in line with the current government policy.
The ministry also said it will continue to focus on improving the skills of local workers as one of the key steps to ensure the local workforce can compete in an increasingly high-tech global economy.
“This skills enhancement aims to provide more capable workers.
“We will also continue to collaborate with the industry to ensure the manufacturing sector can continue to grow more sustainably and contribute to the country’s economic growth.”
The ministry said the government is continuously encouraging the manufacturing sector to adopt automation and technology in line with the Madani government’s aspirations for digitalisation and the New Industrial Master Plan.
When tabling the 2025 budget, Prime Minister Anwar Ibrahim announced that the government will implement MTLM in early 2025 to promote automation and gradually reduce dependence on foreign workers.
For the manufacturing sector, the MTLM will replace the 80:20 policy requirement as a licensing condition.
The government also announced that the levies collected will be channelled back to the industry to enhance the use of technology and automation, increase productivity, reduce dependence on foreign workers and ultimately contribute to enhancing Malaysia’s global competitiveness.
In July 2022, it was reported that the 2016 government ruling that Malaysians must form at least 80% of the workforce in manufacturing companies by the end of that year had been postponed to December 2024.
The two-year deferment came after manufacturing companies complained that applications to employ foreign workers had been held back because of the 80:20 requirement.
Some companies said it was near impossible to attract Malaysians to work in manufacturing companies, let alone keep them, especially at factories that were not air-conditioned.