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Mutual agreement between Indonesia and Malaysia on domestic workers

Malaysia and Indonesia signed an agreement to improve conditions for Indonesian domestic and migrant workers. Indonesia is the largest foreign worker group of Malaysia.

Malaysia Human Resources Minister M Saravanan (left) and Indonesia Manpower Minister Ida Fauziyah signing a joint statement on housing and protections for Indonesian migrant workers in Malaysia's domestic sector
Malaysia Human Resources Minister M Saravanan (left) and Indonesia Manpower Minister Ida Fauziyah signing a joint statement on housing and protections for Indonesian migrant workers in Malaysia's domestic sector | April 1, 2022

After recent cases showing Indonesian migrants and domestic workers facing violence and harassment in Malaysia, leaders from both countries signed an agreement at the start of April ensuring the safety and welfare of Indonesian migrants and domestic workers in Malaysia.

Being an economically stable and progressing country, many Indonesians and nationals from other neighboring low-income countries move towards Malaysia in search of jobs opportunities in construction, plantation, agriculture, and domestic helper sectors. Malaysia's foreign workforce accounts for about 15 percent of the total labor force according to surveys carried out the Department of Statistics Malaysia. With approximately 700,000 workers in 2018, Indonesians are the dominant foreign worker group, benefiting from geographical, cultural and language proximity.

But there have been growing concerns about the violence and discrimination that was being faced by Indonesian workers in Malaysia. Hired in low-skilled jobs, foreign workers are particularly vulnerable to abuses. According to the International Labour Organization (ILO), every year more than 200 Indonesian workers face violence cases involving physical violence, verbal abuse, and rights abuse including low wages and excessive working hours. The number has been growing every year and has reached 500 in the last few years.

A memorandum of understanding was signed on April 1st between the officials of both countries during a ceremony witnessed by Indonesian President Joko Widodo and Malaysian Prime Minister Ismail Sabri Yaakob in order to provide more protection to domestic workers.

With border closures due to the COVID-19 pandemic and the previous agreement that expired in 2016, the MOU could incentivize more Indonesian migrants to go work in Malaysia, which is in need of labor force.

Malaysian may look beyond Indonesia and lower-paid workforce

The agreement will give way to a mechanism that will ensure a suitable environment for Indonesian workers while also setting rules and regulations for employers that will safeguard wage protection while establishing complaint mechanisms. Recruitment will be centralized and fees reduced.

It aims at setting the minimum wage to 1,500 Malaysian Ringgit (US$ 347) for Indonesian domestic workers. There will also be one day off per week and a minimum of 10 hours of rest per day.

This has however given way to concerns. It may urge Malaysian employers to look beyond Indonesia to countries like Vietnam, Cambodia, Sri Lanka, Nepal, Bangladesh or the Philippines for foreign workers. Moreover, many Malaysian households may not be able to afford this much minimum wage, therefore, decreasing employment opportunities for domestic workers. Malaysian Maid Employers Association (Mama) president Engku Ahmad Fauzi Engku Muhsein has given voice to his concerns and has appealed to the authorities to look into this matter.

Moving on, this agreement will prove to be beneficial in the palm-oil industry of Malaysia which is mostly populated by Indonesian workers. Workers have been looking forward to this agreement for months as it will pave way for the hiring of plantation workers from Indonesia. Although Indonesia is the largest palm oil producer, many Indonesians move to Malaysia, the second world's largest producer. Indonesians get better pays and benefit from the stronger Malaysian currency to send remittance back home.

This new agreement also helps tackling illegal immigration and the more than 1.5 million undocumented Indonesian workers by providing with legal ways to enter Malaysia mainly through professional visas. According to Migrant CARE, a Jakarta-based rights group, nearly 100,000 to 200,000 Indonesians illegally enter Malaysia via sea route for work every year.

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