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5.4 Policies for undocumented foreign workers

83. In Malaysia, overstaying the stated period on the PLKS (for foreign workers) and the
employment pass (for expatriates) is considered an offence. Such a worker in Malaysia is
designated as an undocumented worker which refers to a foreign worker without a valid work
permit. A PLKS is also invalidated if the worker changes without authorization the employer
or the designated sector for work and will be thereafter categorized as an undocumented
worker.

84. In this report as clarified in Box 1 above an undocumented worker maybe: 1) a
“foreign worker” whose work permit has expired or become invalidated but choose not to be
repatriated; 2) a “foreign worker” who has chosen to abscond for a variety of reasons, e.g.
changing employers or sectors, debt bondage, mistreatment, etc.; 3) a person who has
overstayed or violated the conditions of the tourist visitor pass and seek work; and 4) a person
who has crossed the international borders into Malaysia other than through an official entry
point and now seek work.

85. Studies in the United States show that the legalization of undocumented workers tend
to raise national income levels over time.7 In Spain, a study showed that legalizing
undocumented workers leads to an increase in fiscal revenue.8 This same study also found
that such an action raised the wage level of the legalized foreign worker and that of the highskilled
citizens, but had negative effects on equivalent low skilled citizens.

86. Other studies in general find that legalizing undocumented workers tend to lower the
unemployment rate of low-skilled citizens and increase the income of citizens as a whole. In
contrast, strong initiatives to detain and deport undocumented workers and the sharp
tightening of border control measures are associated with increases in the unemployment rate
of low-skilled citizens.9

87. The evidence is inconclusive for the general claims that the presence of
undocumented foreign workers and the high reliance on foreign workers cause a lowering of
the wage level and the stealing of jobs from citizens. Instead, what is confirmed is that
countries that rely on migrant workers require the unskilled foreign workers to fill the
undesirable 3D jobs which are unattractive to local workers regardless of the wages on offer.
In other words, undocumented foreign workers take the jobs that no one else wants.
According to Borjas George (2013):" The willingness to take undesirable jobs is what gives
undocumented foreign workers their employment.”10

7
Robert Lynch and Patrick Oakford : "The Economic Effects of Granting Legal Status and Citizenship to Undocumented
Immigrants" March 20, 2013, Center for American Progress; Edwards, Ryan; Ortega, Francesc. "The Economic
Contribution of Unauthorized Workers: An Industry Analysis". Regional Science and Urban Economics.
Volume 67, November 2017.
Monras, Joan; Vázquez-Grenno, Javier; Elias, Ferran: "Understanding the effects of legalising undocumented immigrants",
8
15 May 2018, VOX CEPR Policy Portal.
Chassamboulli, Andri; Peri, Giovanni: "The labor market effects of reducing the number of illegal immigrants".
9
Review of Economic Dynamics, October 2015.
Borjas, George: "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the
10
Labor Market". The Quarterly Journal of Economics. Volume 118 Issue 4, November 2003 . Hanson, Gordon H.
(April 2007). "The Economic Logic of Illegal Immigration. Report to the Council on Foreign Relations" Council on
Foreign Relations (CSR No. 26). April 2007.

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