Malaysia

Labor Compliance Guide

Labor Requirements

The Employment Act of 1955 is a major source of employment regulation in Malaysia. The Malaysian Labour Department administering the national policies and programs that help workers in Malaysia find and keep employment. 

Hours & Pay Regulations

Normal Working Hours

An employee shall not be required under his contract of service to work:

      • More than 5 consecutive hours without a period of leisure of not less than 30 minutes duration;
      • More than 8 hours in one day;
      • More than a spread over a period of 10 hours in one day; and
      • More than 48 hours in one week.

Exceptions:

        • An employee who is engaged in work which must be carried on continuously and which requires his continual attendance may be required to work for 8 consecutive hours inclusive of a period or periods of not less than 45 minutes in the aggregate during which he shall have the opportunity to have a meal; and
        • Where, by agreement under the contract of service between the employee and the employer, the number of hours of work on 1 or more days of the week is less than 8, the limit of 8 hours may be exceeded on the remaining days of the week, but so that no employee shall be required to work for more than 9 hours in one day or 48 hours in 1 week.
        • Any break of fewer than 30 minutes in the five consecutive hours shall not break the continuity of that five consecutive hours.
        • The employer can make a written application to the Director-General take permission to enter into a contract of service with any one or more of his employees, or with any, class, category or description of his employees, requiring the employee or employees, to work more than the limit of hours prescribed. 

Break requirements: 30 minutes of break after every 5 consecutive hours.

 

Shift Work

An employee who is engaged under his contract of service in shift work may be required by his employer to work more than 8 hours in any 1 day or more than 48 hours in any one week but the average number of hours worked over any period of 3 weeks, or over any period exceeding three weeks as may be approved by the Director-General, shall not exceed 48 hours per week. § 60C of Malaysia Employment Act, 1955.

 

Work Regulation (Part-Time Workers) 2010 requires employers to grant part-time workers benefits similar to those enjoyed by full-time employees, including overtime pay, annual and medical leave and observance of public holidays. The rule classifies part-time employees as those who work between 30 and 70 percent of full-time hours. Workers who fall below 30 percent are categorized as casual workers and are exempt from the regulation, while those who work more than 70 percent of full-time hours are considered full-time employees.

 

Task Work
Nothing can prevent any employer from agreeing with any employee that the wages of such employee shall be paid at an agreed rate in accordance with the task, that is, the specific amount of work to be performed, and not by the day or by the piece.

§ 60B of Malaysia Employment Act, 1955

 

Overtime

“Overtime” means the number of hours of work carried out in excess of the normal hours of work per day. The number of working hours must be completed within a 10-hour period. Any work beyond the 10-hour mark is to be considered for overtime regardless of the total hours worked in the day.

 

For any overtime work carried out more than the normal hours of work, the employee shall be paid at a rate not less than 1.5 times his hourly rate of pay irrespective of the basis on which his rate of pay is fixed. The maximum number of overtime hours that an employee can be required to work is 104 hours per month.

 

The Director-General may, on application made to him in writing by an employer or by an employee or a group of employees, permit any employee, or any group, class, category or description of employees in any particular industry, undertaking or establishment to work overtime in excess of the limit of hours so prescribed, subject to such conditions, if any, as he may deem proper to impose.

 

Any work carried out on a rest day, or any of the gazetted public holidays, or any paid holiday substituted therefor, shall not be construed as overtime work.

 

No employer shall require any employee under any circumstances to work for more than twelve hours in any one day. § 60A (2), 60A(4)(a) of Employment Act, 1955 and Employment (Limitations on overtime work) Regulations.

Breaks

Every employee is allowed one whole day for rest each week. The day may be determined from time-to-time by the employer. This shall not apply during the period in which the employee is on maternity leave, sick leave, or during the period of temporary disablement.

 

An employee engaged in shift work any continuous period of not less than 30 hours shall constitute a rest day. The Director-General, on a written application by an employer and subject to any conditions he may deem fit to impose, may. permit the employer to grant the rest day for each week on any day of the month in which the rest days fall and the day so granted shall be deemed to be the employee’s rest day.

 

The employer shall prepare a roster before the commencement of the month in which the rest days fall, informing employees of such. Where the same day in each week has been appointed as the rest day for all employees in the place of employment, the employer may, in lieu of preparing a roster, display a notice at a conspicuous place in the place of employment informing the employee of the fixed rest day so appointed.

 

Every such roster and every particular recorded therein shall be preserved and shall be made available for inspection for a period not exceeding 6 years from the last day of the month in respect of which the roster was prepared or cause to be prepared. § 59 of Malaysia Employment Act, 1955.

Work On Rest Days

No employee shall be compelled to work on a rest day unless he is engaged in work which by reason of its nature requires to be carried on continuously or continually by two or more shifts.

 

An employee who is paid at an hourly/daily rate and who works on a rest day is entitled to receive guaranteed pay, depending on the duration worked: 

      • If the duration does not exceed half the normal hours of work, the employee receives one day’s wages at the ordinary rate of pay; or
      • If the duration is more than half but does not exceed the normal hours of work, the employee receives two days’ wages at the ordinary rate of pay.

An employee who is paid at a monthly rate and who works on a rest day is entitled to receive guaranteed pay, depending on the duration worked: 

        • If the duration does not exceed half the normal hours of work, the employee receives one-half day’s wages at the ordinary rate of pay; or
        • If the duration is more than half but which does not exceed the normal hours of work, one day’s wages at the ordinary rate of pay.

Overtime work performed on a rest day entitles an employee to be paid at a rate which is not less than two times the hourly rate of pay. In the case of an employee employed on piece rates who works on a rest day, he shall be paid twice his ordinary rate per piece. § 60 of Malaysia Employment Act, 1955.

Public Holidays

Every employee shall be entitled to a paid holiday at his ordinary rate of pay on the following days in any one calendar year: on eleven of the gazetted public holidays, five of which shall be:

      • National Day;
      • Birthday of the Yang di-Pertuan Agong;
      • Birthday of the Ruler or the Yang di-Pertua Negeri
      • Workers’ Day;
      • Malaysia Day; and
      • Any day appointed as a public holiday (depending on the state) for that particular year including. 

Additional paid holidays are mandated by individual states. If any of the gazetted public holidays falls on a rest day, the working day following immediately thereafter shall be a paid holiday in substitution.

 

An employee may be required by his employer to work on any paid holiday to which he is entitled and in such event, he shall, in addition to the holiday pay, the employee is entitled to for that day:

      • In the case of an employee employed on a monthly, weekly, daily, hourly, or other similar rates of pay, be paid two days’ wages at the ordinary rate of pay; or
      • In the case of an employee employed on piece rates, be paid twice the ordinary rate per piece.

Where any of the public holidays fall within the period during which an employee is on sick leave or annual leave to which the employee is entitled, the employer shall grant another day as a paid holiday in substitution for such public holiday.

 

By agreement between the employer and an employee, any other day or days may be substituted for one or more of the remaining six gazetted public holidays.

 

Where any of the public holidays or any other day substituted, therefore, falls within the period during which an employee is on sick leave or annual leave to which the employee is entitled under this Act, or falls during the period of temporary disablement under the Workmen’s Compensation Act 1952, or under the Employees Social Security Act 1969, the employer shall grant another day as a paid holiday in substitution for such public holiday or the day substituted therefore.

 

Any employee who absents himself from work on a working day immediately preceding or immediately succeeding a public holiday or two or more consecutive public holidays or any day or days substituted therefore under this section without the prior consent of his employer shall not be entitled to any holiday pay for such holiday or consecutive holidays unless he has a reasonable excuse for such absence.

 

Overtime on a Public Holiday

For any overtime work carried out by an employee in excess of the normal hours of work on a paid public holiday, the employee shall be paid at a rate which is not less than 3 times his hourly rate of pay.

 

If any such holiday falls on a half working day, the ordinary rate of pay payable shall be that of a full working day.

 

An employee who works on a holiday shall be entitled to traveling allowance for that day if payable to him under the terms of his agreement with his employer but such employee shall not be entitled under this subsection to receive an increased rate of any housing allowance or food allowance. § 60D of Malaysia Employment Act, 1955.

Annual Leave

Employees can avail paid annual leave in the following manner:

      • 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.

The paid annual leave to which an employee is entitled shall be in addition to rest days and paid holidays. The employer shall pay the employee the ordinary rate of pay for every day of paid annual leave.

If the employee has not completed 12 months of continuous service with the same employer during the year in which the contract of service terminates, the employee is entitled to paid annual leave in direct proportion to the number of completed months of service. Any fraction of a day of annual leave so calculated which is less than one-half of a day shall be disregarded, and where the fraction of a day is one-half or more it shall be deemed to be one day.

 

Where an employee who is on paid annual leave becomes entitled to sick leave or maternity leave while on such annual leave, the employee shall be granted the sick leave or the maternity leave, as the case may be, and the annual leave shall be deemed to have not been taken in respect of the days for which sick leave or maternity leave is so granted.

 

The employer shall grant and the employee shall take such leave not later than twelve months after the end of every twelve months continuous service and any employee who fails to take such leave at the end of such period shall thereupon cease to be entitled to such leave. An employee shall be entitled to payment in lieu of such annual leave if, at the request of his employer, he agrees in writing not to avail himself of any or all of his annual leave entitlement. 

 

If the contract of service has been terminated by either party before an employee has taken the paid annual leave to which he is entitled, the employer shall pay the employee his ordinary rate of pay in respect of every day of such leave.

 

The employer shall pay the employee his ordinary rate of pay for every day of paid annual leave, and an employee on a monthly rate of pay shall be deemed to have received the annual leave pay if he receives his monthly wages, without abatement in respect of such annual leave, for the month in which he takes such annual leave.

 

Where an employee is granted a leave of absence without pay by his employer during any period of twelve months and the period of absence exceeds in the aggregate thirty days, that period of leave of absence shall be disregarded for the purpose of computing his length of service with the employer. § 60E of Malaysia Employment Act, 1955.

Minimum Wage

Effective for 2019, the minimum wage for all employees in Malaysia is 1,100 ringgit per month.
   

Special Leave

Sick Leave

An employee shall, after examination at the expense of the employer by a registered medical practitioner duly appointed by the employer; or if no such medical practitioner is appointed or, if having regard to the nature or circumstances of the illness, the services of the medical practitioner so appointed are not obtainable within a reasonable time or distance, by any other registered medical practitioner or by a medical officer, be entitled to paid sick leave. Where no hospitalization is necessary, the employee is entitled to:

      • 14 days in the aggregate in each calendar year if the employee has been employed for less than 2 years;
      • 18 days in the aggregate in each calendar year if the employee has been employed for 2 years or more but less than 5 years;
      • 22 days in the aggregate in each calendar year if the employee has been employed for 5 years or more.

In case, hospitalization is necessary the employee will be entitled to 60 days in the aggregate in each calendar year, as may be certified by such registered medical practitioner or medical officer, provided that the total number of days of paid sick leave in a calendar year which an employee is entitled to shall be 60 days in the aggregate.

 

The employer shall pay the employee his ordinary rate of pay for every day of such sick leave. No employee shall be entitled to paid sick leave for the period during which the employee is entitled to maternity allowance, or for any period during which he is receiving any compensation for disablement. § 60F of Malaysia Employment Act, 1955.

Maternity Leave

Under the Employment Act, women are entitled to 60 consecutive days of paid maternity leave for each child, starting as early as 22 weeks’ gestation and no later than the day after the birth. If a doctor certifies that an employee is unable to perform her duties satisfactorily due to advanced pregnancy, an employer may require that she begin maternity leave up to 14 days before the due date. These leave provisions also apply to a still-birth if the pregnancy lasts at least 28 weeks.

To be eligible for paid leave, a pregnant employee must have worked for the employer at some time during the four months preceding her due date and for at least 90 days out of the nine months before her due date. She is not eligible if she already has five or more surviving children of any age. The employee must notify her employer within 60 days of the date she intends to begin her leaves.

Notice may be oral or written and may be given to her supervisor or any employee designated by the employer to collect such notices. If she starts the leave period without giving notice, the maternity allowance is suspended until she does give notice.

 

A female employee who is eligible for maternity allowance shall be entitled to receive from the employer for each day of the eligible period a maternity allowance at her ordinary rate of pay for one day, or at the rate prescribed by the Minister, whichever is the greater. Any rest day or public holiday and sick leave that falls due during maternity leave is counted as part of the maternity leave and will not give rise to any additional leave or payment.

 

A female employee shall be entitled to receive maternity allowance for the eligible period from her employer if; she has been employed by the employer at any time in the 4 months immediately before her confinement; and she has been employed by the employer for a period of, or periods amounting in the aggregate to, not less than 90 days during the 9 months immediately before her confinement. Payment of allowance to the nominee on death or female employee. 

 

If a female employee, after giving notice to her employer that she expects to be confined, commences her maternity leave and dies from any cause during the eligible period, her employer or any employer who would have been, but for the death of the female employee, liable to pay any maternity allowance shall pay to the person nominated by her or, if there is no such person, to her legal personal representative, an allowance at the rate calculated or prescribed from the day she commenced her maternity leave to the day immediately preceding her death. § 37-42 of Malaysia Employment Act, 1955. 

Paternity Leave

Fathers employed within the public sector are entitled to seven days of paternity leave. § 37-42 of Malaysia Employment Act, 1955. 

Marriage Leave

If an employee can produce a properly authenticated certificate of such marriage shall be provided by the employee, then the employee may be eligible to take up to 3 days of leave.


Adoption Leave

Under exceptional circumstances such as a serious illness, the employee can request approval to use unpaid leave. This may be sanctioned when all other forms of leave are exhausted.

Childcare Leave

Under exceptional circumstances such as a serious illness, the employee can request approval to use unpaid leave. This may be sanctioned when all other forms of leave are exhausted.

Last updated on: August 1st, 2019