Malaysia has issued further guidance on the implementation of revised salary thresholds for Employment Passes (EPs), offering employers clearer timelines and limited transitional relief before the new rules take effect on June 1, 2026, as Newland Chase reported.
The latest clarification, released following an announcement by the Expats Service Centre (ESC) on May 21, sets out how pending applications, renewals and selected sector-specific roles will be treated under the incoming framework.
The revisions were first announced earlier this year by the Ministry of Home Affairs (Kementerian Dalam Negeri, KDN) through an update from the Malaysia Digital Economy Corporation (MDEC), marking one of the most significant changes to Malaysia’s expatriate employment regime in recent years.
Higher salary thresholds to reshape EP categories
Newland Chase also mentioned, under the revised framework, the minimum base monthly salary for Employment Pass applications will increase from MYR 3,000 to MYR 5,000, effectively removing salary bands between MYR 3,000 and MYR 4,999 from EP eligibility.
The revised salary bands are structured as follows:
EP Category I: MYR 20,000 and above
EP Category II: MYR 10,000 – MYR 19,999
EP Category III: MYR 5,000 – MYR 9,999
The new thresholds will apply to both new and renewal EP applications submitted from June 1, 2026.
Transitional window offered for pending applications
In its latest clarification, the ESC confirmed that fully completed Employment Pass applications received before June 1, 2026, will continue to be assessed under the current salary criteria, provided all submission requirements have been satisfied.
Authorities also reiterated that EP renewal applications must still be lodged within the standard three-month window prior to pass expiry.
The transitional measures are expected to give employers a short but critical period to finalise pending filings before the higher salary requirements become mandatory.
Businesses with applications nearing completion are being encouraged to prioritise submissions ahead of the implementation deadline.
One-year exemption granted for select GBS roles
Additional flexibility has been introduced for employers in the Global Business Services (GBS) sector that rely on specialised language capabilities.
A one-year exemption will apply to EP Category III (EPIII) positions requiring native or near-native language proficiency. These applications may continue to be assessed under the current salary thresholds until June 1, 2027, subject to eligibility verification and assessment by MDEC.
Companies operating in the GBS sector have been advised to engage with MDEC early to determine whether qualifying roles meet the exemption requirements.
Broader immigration implications remain under review
When the revisions were first announced in January, authorities indicated that the changes could carry wider implications across Malaysia’s immigration and foreign workforce framework.
Potential downstream impacts may include revisions affecting Dependant Passes, domestic helper approvals under Temporary Employment Visit Passes (TEVP), renewal limitations for EP Category III holders, Ministry of Home Affairs prior approval requirements, and Labour Market Testing (LMT) obligations.
“As of the time of writing, ESD has not yet issued a formal announcement,” the earlier advisory noted.
Employers urged to review workforce planning
The salary revisions are expected to prompt companies employing foreign nationals to reassess compensation structures and workforce planning strategies, particularly for employees currently holding EP Category II and III passes who could face re-categorisation or renewal constraints under the updated framework.
“Advance workforce planning and compensation reviews will be critical ahead of the June 2026 implementation date,” the advisory stated.
Further operational guidance from the Expatriate Services Division (ESD) and other authorities is expected in the coming months as businesses prepare for the transition.