Malaysia is uniquely positioned at the forefront of digital innovation and advancement. Its digital economy makes up more than a quarter of its GDP. Additionally, the country is committed to increasing its total number of highly skilled workers.
For these reasons, many international employers are interested in hiring talent in Malaysia but will need to avoid risks resulting from noncompliance and issues with global hiring.
Employee background checks in Malaysia help international employers feel confident in the candidates they're hiring. Continue reading to learn more about how you can conduct background checks in Malaysia.
What is an employee background check?
When global employers hire remote-based individuals living in foreign countries, they face many challenges. One such challenge is ensuring they remain compliant with the local regulations that dictate employee rights in the countries where their employees live.
Whether hiring new employees in Malaysia or relocating existing employees there, employers will need to become aware of and remain compliant with all local tax and employment laws in Malaysia. This includes during the hiring and onboarding process.
An employer conducts an employment background check in Malaysia to ensure a candidate is being truthful about qualifications, like their previous employment history and educational credentials.
It can also be used to determine if the employee is legally entitled to perform the work they're being hired for, like verifying if they possess the necessary licenses and certifications. And also if there is anything in the employee's history that would make the employer not want to hire them.
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What are the benefits of background checks in Malaysia?
There are numerous benefits to conducting a background screening in Malaysia, including:
- They ensure candidates are as qualified as they claim to be
- They ensure you remain compliant by verifying the candidate is legally entitled to perform the work they're being hired for
- They alert you to a candidate's history of negative behavior, such as misconduct or sexual harassment
- They help you feel comfortable with and trusting of your team
- They can help protect your company from potential legal complications by alerting you to a history of criminal activity
What are the types of background checks in Malaysia?
There are several types of background checks you can conduct as an employer in Malaysia.
Criminal record check in Malaysia
A criminal record check in Malaysia will alert you to any crimes prospective employees have been convicted of. Similar to a credit history check, this can be especially important when hiring an individual in a role where they will be managing corporate funds or will have access to other employees' information.
Employment history check
An employment screening in Malaysia is performed when you want to verify a candidate's employment history. This can help ensure the candidate has the relevant work experience necessary to perform the job they're being hired for. This also confirms that they were truthful about how long they worked for previous employers and that they haven't had long absences between employment.
A pre-employment medical screening in Malaysia may be conducted by law. However, it is typically only used when relevant to an employee being able to perform their job. For example, if they will need to exert physical energy or lift heavy objects.
It may also include a pre-employment drug screening, particularly if your company policy stipulates that employees undergo a drug test before being hired.
Credit history check
Employers can run a credit history check on prospective candidates so long as they receive permission. However, this screening is typically only used when it's relevant to the employee's ability to perform their job duties. For instance, if they will be working at a financial institution, hired for a position where they are in charge of the business's finances, or will have access to personal financial information of other employees.
Similar to an employment t history check, an educational history check is beneficial to verify a candidate's educational history. This is especially important when you have minimum qualifications for a role, like a Bachelor's or Master's degree.
This is also an essential check to run when an employee is required by law to possess specific qualifications, such as engineers or researchers.
Social media and working with children check
Although not an official check, exploring potential candidates' social media pages and online presence can give you an idea of whether you feel a candidate would be a good representative of your company and align with your company's values.
Working with children check (WWCC) in Malaysia is a background check specifically created to ensure that individuals who have jobs that work in close contact with children do not have a history of sexually predatory behavior toward them.
Requirements for background check in Malaysia
You should be prepared for the requirements to conduct background checks in Malaysia to change based on the type of employment you're conducting.
However, you will likely need to meet some or all of the following requirements when conducting pre-employment screenings in the country:
- The applicant's signed consent release form
- The applicant's personal information (name, date of birth)
- The applicant's educational history (where they attended school, at what time)
- The applicant's employment history (previous employer names, what position they held)
- The applicant's passport number
- The applicant's MyKad (identification card) number
Steps in conducting a background check in Malaysia
Conducting a pre-employment screening in Malaysia is a decision many employers choose to make to ensure they're hiring quality candidates who align with their company's values.
However, when you conduct any background checks in Malaysia, you will need to be sure you remain compliant with the local regulations to avoid any potential legal complications.
The steps required in conducting a background check in Malaysia will vary based on factors like the type of information you're seeking to verify. It also depends on the agencies or organizations you need to work with to obtain this information.
If you choose to partner with a third party to run your background check — this is recommended to ensure compliance — they may have specific requirements for you. But you can loosely expect to follow the steps outlined below:
- Select the type(s) of background check you plan to run: The first step is determining what information you want to learn about a candidate. This will dictate which background checks you choose (employment verification, criminal record check)
- Obtain consent from the applicant: You will need written consent from the candidate for most agencies or organizations to provide you with personal information on the individual.
- Screen your applicant: Once you've gathered the necessary documentation and written consent, you can move forward with the background check.
Are employee background checks legal in Malaysia?
Unlike some countries, there are no laws in Malaysia that explicitly forbid employers from conducting background checks in Malaysia. However, you will need to be sure that any background check you conduct remains compliant with the Personal Data Protection Act of 2010, the relevant regulatory document.
Planning to hire in Malaysia? Here's how Skuad can help
When you're a global employer hiring employees living in Malaysia, you will need to be prepared to run international background checks on candidates' employment histories, financial histories, criminal backgrounds, and more.
Skuad’s platform is the all-in-one employment and payroll platform you need to hire, manage, and pay employees all over the world from one place. Skuad helps you easily comply with all employment laws in Malaysia, helping you reduce legal risks and fines. Leave the complexities of hiring and payments to us so that you can focus on growing your teams in Malaysia and beyond.
Book a demo today to speak to our experts!
Below is a list of frequently asked questions about conducting background checks in Malaysia.
Are background checks legal in Malaysia?
Background checks are legal in Malaysia, so long as you receive consent from your prospective employee, and you comply with the Personal Data Protection Act of 2010.
How long does a background check take in Malaysia?
The amount of time it takes to conduct a background check in Malaysia varies based on factors like the type of background check conducted and the third-party agency used. But you can typically expect this process to take between five and nine business days.
How do companies check backgrounds in Malaysia?
Employers are entitled to use a third-party company of their choosing to conduct background checks in Malaysia. However, this will require the prospective employee to provide their consent for the company to obtain their personal information from the relevant agencies.
What is a pre-employment background check in Malaysia?
A pre-employment background check in Malaysia is a check conducted by an employer, or a third party the employer hires. This verifies that all the information the employee has provided regarding their qualifications and relevant work experience is accurate.