Malaysia-Thai labour crackdown will cause disruption

Subject

Labour regulations and crackdowns in Malaysia and Thailand.

Significance

Malaysia has warned employers that it will not extend the December 31 deadline for its legal rehiring and voluntary deportation programmes for undocumented workers, despite industry concerns of labour shortages if the enforcement mechanisms go ahead. Malaysia and Thailand are independently pursuing policies to be implemented in early 2018 that will see hefty penalties for undocumented workers and their employers.

Impacts

• Rapid loss of labourers could cost Thai agriculture 300 million dollars this year.
• Stricter Malaysian and Thai workplace inspections could bring more corruption.
• Thailand’s registration effort could lessen US and EU concern over Thai human trafficking and illegal fishing.
• Labour shortages could delay regional infrastructure projects.
• Foreign worker-reliant SMEs in both countries will find difficulty covering rising labour costs after January 2018.