Summary of Employment Laws in Malaysia
EMPLOYMENT ACT, 1955
The Employment Act, 1955 is the main legislation on labour matters in Malaysia.
The Employment Act provides minimum terms and conditions (mostly of monetary value) to certain category of workers :-
- Any employee as long as his month wages is less than RM2000.00 and
- Any employee employed in manual work including artisan, apprentice, transport operator, supervisors or overseers of manual workers, persons employed on vessels and even domestic servants are classified as employees even if their wages is more than RM2000.00 per month.
|Paid maternity leave||:||60 days|
|Normal work hours||:||Not exceeding eight hours in one day or 48 hours in one week|
|Paid holiday||:||At least 11 gazetted public holidays ( inclusive of five compulsory public holidays; National Day, Birthday of the Yang Dipertuan Agong, Birthday of Ruler/Federal Territory Day, Labour Day and Malaysia day) in one calendar year and on any day declared as a public holiday under section 8 of the Holiday Act 1951|
|Paid annual leave for employees:|
|Less than two years of service||:||8 days|
|Two or more but less than five years of service||:||12 days|
|Over five years of service||:||16 days|
*Minimum paid annual leave to be provided for employees
|Paid sick leave per calendar year:|
|Less than two years of service||:||14 days|
|Two or more but less than five years of service||:||18 days|
|Over five years of service||:||22 days|
|Where hospitalisation is necessary||:||Up to 60 days (inclusive of the paid sick leave entitlement stated above)|
*Minimum paid sick leave to be provided for employees
|Payment for overtime work:|
|Normal working days||:||One-and-a-half times the hourly rate of pay|
|Rest days||:||Two times the hourly rate of pay|
|Public holidays||:||Three times the hourly rate of pay|
Source: Ministry of Human Resources – www.mohr.gov.my
Children and Young Persons (Employment) Act 1966
- This act prohibits children from working near hazardous and poisonous materials.
- No child (under the age of 15 years) or young person (between age of 15 years and under the age of 18 years) engaged in any employment shall in any period of 7 consecutive days be required or permitted to work for more than 6 days.
- For child person only required to work not more than 6 hours in a day and for young person only allowed to work maximum 7 hours per day.
- No child or young person shall or be required/permitted to be engaged in employment contrary to the Factories and Machinery Act 1967, the Occupational Safety and Health Act 1994 or the Electricity Supply Act 1990 or in any employment requiring him to work underground.
Employment (Restriction) Act 1968
- Non-Malaysian citizens are required to obtain a valid work permit before they can be employed locally.
- Working without a valid work permit is strictly illegally under the Immigration Act 1966.
Occupational Safety and Health Act 1994
- This Act which provides the legislative framework to secure the safety, health and welfare among all Malaysian workforce and to protect others against risks to safety or health in connection with the activities of persons at work.
- Section 15 outlines the duties of the employer includes maintenance of plant and systems that are safe and without risk to health, provides information, instruction, training and supervision to ensure the safety and the health at work.
- Section 16 requires the employer to formulate safety and health policy at the workplace and regularly revise the policies to align the policies with changes and best practices in the business world.
- Safety and Health Policy is to demonstrate the company’s commitment and concern to ensure safety and health at place of work. Issues on safety and health stated in the policy must be taken into account.
Please refer to Department of Occupational Safety and Health for further details
Factories and Machinery Act 1967
- Gives protection in terms of health and safety for all workers working in factories regardless of sex
- The jurisdiction of the act covers all factories
Minimum Wages Order 2018
- The Minimum Wages Order was first implemented on 1 January 2013 and the latest revision was on 28 November 2018.
- Minimum wages is basic wages, excluding any allowances or other payment.
|MINIMUM WAGES RATE (As per Guidelines on the implementation of the Minimum Wages Order 2018 [P.U (A) 265/2018])|
|Number of days worked in a week|
- All local and foreign employees who have entered into a contract of service with an employer shall be entitled to receive minimum wages.
- The Minimum Wages Policy also applies to employees who are paid on piece-rates, tonnage, task, trip or commission.
- Domestic servants (eg. maids, cooks, guards, gardeners and personal drivers) and apprentices who undergo training for a period not less than two years are not covered by minimum wages.
Minimum Retirement Age Act 2012
- The minimum retirement age increased from 55 to 60 for civil servants and the private sector employees in Malaysia.
- The act doesn’t prevent employees from choosing to retire early if the contract of service or collective agreement permits earlier retirement.
- The new law will impose a fine of 10,000 ringgits on any employer found guilty of requiring an employee to retire prior to age 60. However, the legislation does not prevent employees from choosing to retire earlier than age 60 if the service contract or collective agreement that applies to their job permits an earlier retirement date
Statutory Payroll Contributions
Employment of Expatriates in Malaysia
Summary of Immigration Process
Company’s Paid Up Capital Requirements for Employment of Expatriate
Requirements to Apply for Expatriate Employment Pass
Approvals Required from Agencies/ Regulatory Bodies for Employment Pass Application
List of Positions Not Applicable for Expatriate Positions