Why You Should Only Use Licensed Employment Agencies

In Malaysia, employment agencies that recruit foreign workers must hold a valid licence issued by the relevant authorities. For agencies operating in Sarawak, this means being licensed by Jabatan Tenaga Kerja Sarawak (JTKSWK).

Yet not every agency operating in the market is properly licensed. Understanding the difference — and the risks of using an unlicensed operator — can save employers significant trouble.

What Makes an Agency "Licensed"?

Under the Private Employment Agencies Act 1981 (amended 2017), a licensed employment agency has been approved by the government to carry out recruitment and placement activities. In Sarawak, licences are issued by JTKSWK. This means:

• The agency is registered and recognised by the relevant authorities
• There is a government body you can turn to if issues arise
• The agency can be held accountable through official channels
• Proper record-keeping is expected as part of the licensing conditions

Risks of Using an Unlicensed Agency

For Employers

The consequences can be severe:

• Fines up to RM200,000 for engaging unlicensed operators
• Criminal liability — imprisonment of up to 3 years is possible
• Invalid work permits — workers placed through unlicensed channels may not have proper documentation, exposing your business to further penalties
• No recourse — if something goes wrong, there is no regulatory body to mediate or hold the agency accountable

Under Section 55B of the Immigration Act 1959/63, employers found with undocumented workers face fines of RM10,000 to RM50,000 per worker, and imprisonment of up to 12 months. For employers with 5 or more undocumented workers, the penalty escalates to imprisonment of 6 months to 5 years, plus whipping of up to 6 strokes.

For Workers

Workers placed through unlicensed agencies are especially vulnerable:

• Risk of deportation and blacklisting from future entry
• Exposure to exploitation — passport confiscation, wage theft, unsafe conditions
• No legal protection or proper employment contract
• Difficulty accessing healthcare, insurance, or social security

How to Verify an Agency's Licence

Before engaging any employment agency, employers should:

1. Ask for the licence number — a legitimate agency will provide this readily
2. Check with JTKSWK — JTKSWK publishes a list of licensed private employment agencies on their official website. You can also contact them directly to confirm a licence is active and valid
3. Look for the licence displayed — licensed agencies typically display their credentials at their office and on their website
4. Verify SSM registration — the agency should be a registered company with Suruhanjaya Syarikat Malaysia

What a Licensed Agency Provides

Working with a licensed agency means:

• Accountability — the agency is answerable to government regulators
• Recourse — if something goes wrong, there is an official body you can escalate to
• Proper contracts — workers receive legitimate employment agreements
• Post-placement support — ongoing assistance after workers arrive
• Peace of mind — you have a verifiable, traceable partner
• Labour Licence compliance — a licensed agency helps ensure your company meets the Labour Licence requirement (introduced November 2025 under the Sarawak Labour Ordinance) for Employment Pass applications
• Local Understudy coordination — agencies can advise on appointing and registering a local understudy within the required 6-month window after EP approval

Protect Your Business

Hiring foreign workers involves navigating a complex regulatory environment. A licensed agency handles this on your behalf — properly, legally, and with full accountability.

Taking shortcuts with unlicensed operators may seem easier or cheaper in the short term, but the legal and financial risks far outweigh any perceived savings.