Bangladeshi workers in Malaysia demand unpaid wages after factory closure

Nearly 280 Bangladeshi migrant workers in Malaysia are demanding unpaid wages and other compensation amounting to hundreds of thousands of dollars after their employer, a plastic parts manufacturer supplying major Japanese brands, shut down its operations.

Kawaguchi Manufacturing, based in Port Klang — Malaysia's largest port — allegedly withheld wages for up to eight months before closing late last year, leaving workers stranded and financially burdened.

The affected workers have filed formal complaints both in Malaysia and in Bangladesh.

The situation has strained relations between the two countries and exposed the exploitative practices of a handful of recruitment agencies and intermediaries controlling labour migration.

Bangladesh's expatriate welfare adviser Asif Nazrul met with Malaysian Home Minister Steven Sim Chee Keong in Kuala Lumpur last week.

Abuse Allegations and Debt Traps

A Malaysian labour tribunal ordered Kawaguchi to pay over 3 million ringgit (approx. $694,000) in back wages, but workers have only received 251,000 ringgit ($58,101) so far.

Many have taken on new jobs but remain mired in debt after borrowing heavily to finance their migration.

The workers allege they were made to work 24-hour shifts without breaks or holidays, received no overtime, and had their passports confiscated.

They also reported living in overcrowded, inadequate housing and facing delays in visa renewals.

Following the closure in December, prompted by companies like Sony and Panasonic suspending their orders, many workers say they were forcibly relocated by Malaysian officials to new factories 360 kilometres away.

Some were housed in unsanitary shipping containers.

Around 80 workers were assigned to palm oil plantations but refused the work.

Eventually, most returned to Port Klang seeking alternative employment and struggling to manage growing debt.

 It reportedly took three months for them to receive permission to change jobs legally.

Kawaguchi and Malaysia's labour department have not responded to media requests for comment.

Personal struggles and broader impact

Md Kabir Hossain, 19, said he borrowed over $4,000 to migrate from Rangpur, Bangladesh, in November 2023 after his family's textile shop failed. As the family's sole earner, he defaulted on a loan and could no longer send money home. "I am constantly worried about what will happen to my family," he said.

Another worker, Parvez Azam, said, "If this goes on, we'll die here."

Across Southeast Asia, labour-intensive industries such as manufacturing, construction, and plantations depend heavily on migrant labor from countries like Bangladesh, Nepal, and Myanmar. Bangladeshis often end up in the most hazardous and lowest-paying roles.

According to the International Labor Organization (ILO), the migration cost from Bangladesh to Malaysia is among the world's highest.

Although the official recruitment fee is $650, Kawaguchi's workers say they paid close to $5,000, plunging many into debt bondage.

A 2024 study revealed that over 70% of Bangladeshi workers in Malaysia spend at least half their wages on repaying loans. Nearly all reported being misled about wages and facing labour exploitation.

Corporate Responsibility and Compensation Efforts

Three of Kawaguchi's former clients — Panasonic, Sony, and Daikin — agreed to collectively reimburse about $1.3 million in recruitment fees. However, this does not cover interest rates on loans, which can reach 30%, and many workers have already defaulted on payments.

Labor rights advocate Andy Hall said the workers are in a desperate situation, vulnerable to worsening exploitation.

Daikin, which accounted for only 1%–2% of Kawaguchi's orders, has reached a settlement with the workers. Panasonic said it is reimbursing recruitment costs proportionally and had attempted to help Kawaguchi correct labour violations before severing ties. Sony stated it terminated its relationship with Kawaguchi after the supplier failed to meet required labour standards.

The workers continue to seek redress. US-based attorney Terry Collingsworth, representing them, is in talks with Sony and Panasonic.

In a letter dated January 16, he urged the companies to honour their public commitments to address human rights abuses in their supply chains.