The Investment, Trade and Industry Ministry (Miti) has announced that the suspension of the 80:20 employment ratio requirement for the manufacturing sector will continue until the Multi-Tiered Levy Mechanism (MTLM) is fully implemented.

The 80:20 policy refers to the employment condition that mandates a ratio of 80 per cent local workers and 20 per cent foreign workers in certain sectors, especially in manufacturing.

The MTLM is an incentive for employers to reduce dependence on foreign workers and increase the hiring of local workers, in line with the current government policy.

In a statement today, the ministry said this measure provides flexibility for industries to adjust their labour needs more flexibly, without affecting the government's objective of reducing dependence on foreign workers.

"However, taking into account various factors and feedback from the industry sectors, the suspension of the 80:20 policy compliance will continue until the full implementation of MTLM," it said.

Meanwhile, Miti stated that it will continue to focus on improving the skills of local workers as one of the key steps to ensure that the local workforce can compete in an increasingly high-tech global economy.

"This skills enhancement aims to provide more capable workers who can contribute to dignified incomes and drive sustainable economic growth.

"Miti will also continue to collaborate with the industry to ensure that the manufacturing sector can continue to grow more sustainably and contribute to the country's economic growth," it added.

Miti said the government is continuously encouraging the manufacturing sector to transition to automation and technology in line with the aspirations of Malaysia Madani and the New Industrial Master Plan (NIMP 2030).

During the 2025 Budget presentation, the prime minister announced that the government will implement MTLM in early 2025 to promote automation and gradually reduce dependence on foreign workers.

For the manufacturing sector, the MTLM will replace the 80:20 policy under the manufacturing licence conditions.

The government also announced that the levies collected will be channelled back to the industry to enhance the use of technology and automation, increase productivity, reduce dependence on foreign workers, and ultimately contribute to enhancing Malaysia's global competitiveness.