The Malaysian government has decided to halt the recruitment of new foreign workers, deputy Prime Minister Ahmad Zahid Hamidi has said.
The deputy prime minister said employers who bring in foreign workers illegally will be subjected to whipping.
Ahmad said the government has decided to give harsh punishment to agents who protect illegal workers as slapping fines has proved to be of no effect.
"Whipping will be meted out by courts because the punishment with fine has no effect as employers and agents still keep bringing in illegal foreign workers," said Ahmad.
The decision, taken by the cabinet on Friday, will not affect hiring of domestic maids, the minister said.
Business owner who want foreign workforce can hire those who are already in the county, including those whose permits have expired.
Malaysia has 2.1 million registered migrant workers as per official records. Of these around 300,000 are from Bangladesh. There is also an estimated 1.7 million undocumented foreign workers in the country.
"There will not be one, let alone 1.5 million new foreign workers coming into our country. Employers who need workers will have to apply to legalise existing foreigners in the country without work permits or whose permits have expired," he said.
Reports last month that the government planned to bring in 1.5 million workers from Bangladesh had caused an uproar.
The government said the report was a "misconception" after it kicked up protests from Malaysian trade unions and Bangladeshi recruiters.
Workers' groups and trade unions in Malaysia have criticised the government's plan to bring in hordes of Bangladeshi workers as it would limit the local people's employment opportunities.
Malaysia's plantation and manufacturing sectors are in need of hundreds of thousands of labourers even as Malaysians are increasingly turning away from these unattractive jobs.