Labour market test and MYFutureJobs for Employment Pass applications
A guide for Malaysian employers hiring foreign talent. It covers what the labour market test is, where MYFutureJobs advertising fits into an Employment Pass timeline, and how exemptions are actually decided — alongside the Employment Pass rules in force since 1 June 2026.
What the labour market test is
Malaysia’s expatriate policy is built on the principle that a role should go to a Malaysian where a Malaysian can do it. The labour market test is how that principle is applied at the point of hiring: the employer advertises the vacancy through MYFutureJobs, the national employment portal operated by PERKESO, and the outcome forms part of the picture when the Employment Pass application is assessed by the Expatriate Services Division (ESD).
This sits upstream of everything else. It happens before the Employment Pass application, which means it belongs in your hiring timeline at the planning stage. The most expensive version of this mistake is discovering the requirement after you have already made an offer with a start date attached.
Who is exempt — and why we check rather than assert
Exemption is determined by the authorities, not by the employer, and it is applied by role, seniority, sector and salary. Senior and specialist positions, and certain intra-corporate transfers, are commonly treated differently from general hiring.
Published third-party guidance on the precise thresholds is inconsistent, and the underlying policy has been actively changing through 2026. We therefore confirm the current position for your specific role with ESD rather than quoting a number that may be out of date by the time you rely on it. The asymmetry matters: advertising when you did not need to costs you weeks, and not advertising when you should have costs you the application.
The Employment Pass rules this sits alongside
Malaysia revised the Employment Pass salary policy with effect from 1 June 2026. All new and renewal applications submitted on or after that date are assessed against these thresholds. Thresholds are assessed on basic salary only — allowances, bonuses, commissions, housing and transport benefits and benefits-in-kind do not count towards the minimum.
| Category | Minimum basic salary | Tenure | Replacement plan |
|---|---|---|---|
| Category 1 | RM20,000 and above | 10-year cumulative tenure cap | Not required |
| Category 2 | RM10,000–RM19,999 | 10-year cumulative tenure cap | Required |
| Category 3 | RM5,000–RM9,999 for general sectors, RM7,000–RM9,999 for manufacturing and manufacturing-related services | 5-year cumulative tenure cap | Required |
Source: Expatriate Services Division (ESD), Jabatan Imigresen Malaysia — revised Employment Pass salary policy. Reviewed 18 July 2026.
The replacement plan
The Ministry of Home Affairs describes a replacement plan as a structured plan to prepare the local workforce to take over an expatriate’s role within a defined employment period — covering the positions to be transferred, the training and knowledge transfer involved, a realistic timeframe, and continuity planning so the transition does not disrupt operations. It is often referred to in industry as a succession plan; the two mean the same thing here.
Common questions
- What is the labour market test for an Employment Pass in Malaysia?
- Before hiring an expatriate, a Malaysian employer is generally expected to show that the role was genuinely offered to the local workforce first. In practice this means advertising the vacancy through MYFutureJobs, the national employment portal operated by PERKESO (SOCSO), and being able to evidence the outcome when the Employment Pass application is assessed.
- Which roles are exempt from MYFutureJobs advertising?
- Exemption is decided by the authorities rather than by the employer, and the criteria are applied by role, seniority, sector and salary. Senior and specialist roles, and certain intra-corporate transfers, are commonly treated differently from general hiring. Because published guidance on the exact thresholds is inconsistent and subject to change, we confirm the current position for your specific role with ESD before you advertise — advertising unnecessarily costs you 30 days, and skipping it when it was required costs you the application.
- How long must a vacancy be advertised?
- The advertising period is set by the authorities and depends on the role. It is commonly a matter of weeks rather than days, and it runs before the Employment Pass application is submitted — so it belongs in your hiring timeline from the outset, not at the end of it.
- Does the labour market test apply to Employment Pass renewals?
- Renewals are assessed against the requirements in force at the time of submission. Since 1 June 2026 that includes the revised salary thresholds and, where applicable, the replacement plan. An existing pass holder whose salary now falls below the revised band for their category is the most common renewal problem we are asked to solve.
- How does this interact with the replacement plan requirement?
- They are separate obligations that both point at the same policy objective. The labour market test asks whether a Malaysian could have filled the role now. The replacement plan — which the Ministry of Home Affairs describes as a structured plan to transfer knowledge and expertise to local employees within the expatriate's employment period — asks how a Malaysian will be able to fill it later. Category 2 and Category 3 applications are the ones where the plan is expected.
Check your position before you advertise
We are a Malaysian work permit agency operating since 2016. If you are planning an Employment Pass hire, we can confirm whether the labour market test applies to your role, what the current advertising expectation is, and whether the salary you are offering clears the band for the category you need.