Employment Agencies Can Still Collect Fees Minister Clarifies

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Human Resources Minister M Saravanan has clarified that licensed private employment agencies are allowed to impose a fee on employers, local jobseekers, and non-citizen workers.
He acknowledged that many were confused after two individuals were arrested by the MACC on Wednesday (Aug 3) in relation to private recruitment agencies.
"I received many calls after the arrest. They were confused as to whether private recruitment agencies are no longer allowed to collect fees from employers and employees."
"I would like to clarify, the act of collecting placement fees is allowed as usual under the Private Employment Agencies Act," Saravanan (above) told Malaysiakini.
He said the Private Employment Agencies Act 1981 (Act 246) is a law enforced by his ministry through the Department of Labor and controls private employment agencies in Malaysia.
"Under the act, the license holder is allowed to charge a fee to any local job seeker for all categories of employment whether to work within or outside Malaysia.
"The placement fee can be charged either to employers, local jobseekers, or non-citizen workers," he said.
However, he warned strict action will be taken against any employment agency for wrongdoing, including corruption.
On Wednesday, the MACC arrested a businessperson in his 30s and an owner of an employment agency company in his 50s.
According to a source, the businessperson was being investigated in connection with bribery amounting to over RM1 million and the other was suspected of paying bribes to companies providing platforms for foreign worker applications.
Additionally, six suspects were arrested including a CEO of an IT company, a senior officer of said company, and four others from a recruitment agency.
Charging fee is old practice
Meanwhile, Saravanan said the act of charging this fee has been a practice for a long time.
"It was already a practice before I became a minister. It is not something new. However, the ministry, under me, has made an improvement to overcome previous weaknesses.
"Any element of corruption involving these agencies will be subject to action from the relevant departments," he said.
Private employment agencies, he said, can impose a placement fee of up to 25 percent of the first month's basic salary of a local employee.
The fee can be no more than one month of the first month's basic salary of a non-citizen employee, he added.
It is a crime for the agency to charge excessively. Those who are convicted can be fined up to RM50,000, imprisoned for not more than one year, or both.
"Anyone who carries out recruiting activities must be licensed. Failing so, he or she, if convicted, can be fined up to RM200,000 or imprisoned for not more than three years or both," he said. - Mkini

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