KUALA LUMPUR - Under Section 25 of the Employment Act 1955, employers are required to pay wages through a bank account.

Employers in Malaysia are not legally required to ensure foreign workers have a bank account before employment begins.

However, wage payments must be made via bank accounts once workers are onboarded, according to the Ministry of Human Resources (MoHR).

Senior Assistant Director of the Foreign Workers Division, Kala Thangarajoo, said employers must be ready to open a bank account for wage payments.

“If migrants have proper legal documentation, meaning they have entered Malaysia through the correct and legal channels. So, they will not face any issues in opening a bank account. 

“Problems usually arise when individuals do not possess complete or valid documents.” Kala said at the National Forum on Foreign Worker Management at Royale Chulan Kuala Lumpur, last Monday. 

Under MoHR’s new framework, the ministry has strengthened employer accountability and worker protection measures.

The framework ensures wages are traceable, reducing the risk of delayed or withheld payments for migrant workers.

Both local and foreign workers are subject to the same bank-payment rules to ensure fairness and compliance.

Employers who fail to comply with Section 25 can face fines of up to RM 50,000.

For migrant workers, having a bank account provides secure, transparent, and traceable payment of wages.

The framework aligns Malaysia with international labour standards and strengthens financial inclusion for migrant employees.

Foreign workers account for roughly 14 to 16% of the Malaysian workforce, highlighting the importance of proper wage mechanisms.

MoHR said the new measures demonstrate the government’s commitment to protecting workers and enforcing legal employment standards.

Kala (third from right) was speaking at the National Forum on Foreign Worker Management at the Royale Chulan Kuala Lumpur last Monday