Last updated on: February 28th, 2022

Labor Requirements

The Labor Law in Malaysia is regulated mainly by the Employment Act, of 1955. The Law governs the terms and conditions of employment such as working hours, holidays and rest periods, wages, overtime, and other employment conditions.

Hours & Pay Regulations

Normal Working Hours

An employee shall not be required to work –

      • 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.

The government authority may on written application from the employer allow the work to be carried out in excess of the normal working hours if justified on the grounds of special circumstances necessary for the continuance of business operations.

 

Via an agreement between the employers and employees, where the number of working hours on 1 or more days of the week is less than 8 hours, the limit of 8 hours may be exceeded on the remaining days of the week, provided that no employee shall be required to work for more than 9 hours in 1 day or 48 hours in 1 week.

 

Casual Employee – A casual employee is one engaged occasionally or on an irregular basis, as and when needed, and whose weekly working hours do not exceed 30% of the weekly working hours of a full-time employee (eg if full-timers work a 48 hour week, casuals work no more than 14.4 hours per week). § 60A of Malaysia Employment Act, 1955 and The Employment (Part-Time Employees) Regulations 2010.

 

Record Requirements

An employer shall maintain a register concerning each employee with information as may be required to be kept by the legislation for a period of at least 6 years. §  61 of Malaysia Employment Act, 1955.

 

Shift Work

An employee who is engaged in shift work may be required by the employer to work more than 8 hours in any day or more than 48 hours in any one week in a manner that the average number of hours worked over any period of 3 weeks, or over any period exceeding 3 weeks as may be approved by the government authority, shall not exceed 48 hours per week. § 60C of Malaysia Employment Act, 1955.

 

Task Work

An employer and employee may agree that the wages of the employee shall be paid at an agreed rate in accordance with the task, i.e. the specific amount of work to be performed and not by the day or by the piece. § 60B of Malaysia Employment Act, 1955.

Overtime

Any work performed beyond the normal working time of 8 hours per day or 48 hours per week or spread over 10 hours is considered as overtime. An employee may be required to perform overtime work in cases related to accidents, work necessary for continuous operations, work necessary for the life of the community, urgent work, etc.

 

The number of working hours must be completed within the spread of the 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. The maximum number of overtime hours that an employee can be required to work is 104 hours in any one month.

 

Any work carried out on a rest day, or any of the gazetted public holidays, or any paid holiday substituted, therefore, shall not be construed as overtime work for the purposes of calculating 104 hours of overtime in any one month.

 

No employer shall require any employee under any circumstances to work for more than 12 hours in any one day.

 

Pay – 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 the hourly rate of pay. § 60A (2), 60A(4)(a) of Employment Act, 1955 and Employment (Limitations on overtime work) Regulations, Art. 2

Night Work

No employer shall require any female employee to work in any industrial or agricultural undertaking between the hours often 7 o’clock in the evening and 5 o’clock in the morning nor commence work for the day without having had a period of 11 consecutive hours free from such work.

Breaks

An employee who works more than 5 consecutive hours is entitled to a break of not less than 30 minutes. Any break of fewer than 30 minutes in the 5 consecutive hours shall not break the continuity of that 5 consecutive hours.

 

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 the employee shall have the opportunity to have a meal. § 60A of Malaysia Employment Act, 1955. 

 

Weekly Rest 

Every employee shall be allowed in each week a rest day of 1 whole day as may be determined from time to time by the employer. For employees engaged in shift work, any continuous period of not less than 30 hours shall constitute a rest day. 

 

This shall not apply during the period in which the employee is on maternity leave, on sick leave, or during the period of temporary disablement. § 60 of Malaysia Employment Act, 1955.

Work On Rest Days

No employee shall be compelled to work on a rest day unless engaged in work which by reason of its nature requires to be carried on continuously or continually by 2 or more shifts. In the case of an employee employed on a daily, hourly, or other similar rates of pay who works on a rest day, shall be paid for any period of work-

      • which does not exceed half his normal hours of work, one day’s wages at the ordinary rate pay; or,
      • which is more than half but does not exceed his normal hours of work, 2 days’ wages at the ordinary rate of pay.

In the case of an employee employed on a monthly rate of pay who works on a rest day, he shall be paid for any period of work – 

        • which does not exceed half his normal hours of work, wages equivalent to half the ordinary rate of pay for work done on that day; or
        • which is more than half but which does not exceed his normal hours of work,1 day’s wages at the ordinary rate of pay for work done on that day.

Overtime Work on Rest Day – An employee shall be paid at a rate that is not less than 2 times the hourly rate of pay. In the case of an employee employed on piece rates who works on a rest day, shall be paid 2 times the ordinary rate per piece. § 60 of Malaysia Employment Act, 1955.

Public Holidays

Every employee shall be entitled to 11 paid holidays at his ordinary rate of pay on the following days in any 1 calendar year 5 of which shall be—

      • The National Day;
      • The Birthday of the Yang di-Pertuan Agong;
      • The Birthday of the Ruler of the Yang di-Pertua Negeri
      • The Workers’ Day; and
      • Malaysia Day.

The employer is then free to choose the remaining 6 gazetted public holidays to make up the 11 days, and these chosen days must be effectively communicated with the employees either through notice or stated in the employment contract:-

      • Birthday of the Prophet Muhammad (s.a.w)
      • Chinese New Year  (2 days, except 1 day in the states of Terengganu and Kelantan)
      • Wesak Day,
      • Hari Raya Puasa (2 days)
      • Hari Raya Haji (1 day, except 2 days in the states of Terengganu and Kelantan)
      • Deepavali
      • Christmas day
      • Nuzul Al-Quran – only in Federal Territory of Kuala Lumpur, Putrajaya, Labuan

The employer shall exhibit conspicuously at the place of employment before the commencement of each calendar year a notice specifying the remaining 6 gazetted public holidays in respect of which his employees shall be entitled to paid holidays. Via an agreement between the employer and an employee, any other day or days may be substituted for one or more of the said remaining 6 gazetted public holidays. Additional paid holidays are mandated by individual states.

 

Where any of the public holidays or the substitute holidays fall during sick leave, annual leave, or temporary disablement, the employer shall grant another day as a paid holiday in substitution for that public holiday.

 

A public holiday falling on a rest day – 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.

 

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. 

 

Pay for Work on Public Holiday

An employee who performs work on a public holiday is entitled to, in addition to the holiday pay, an amount equal to 2 days of wages at the ordinary rate of pay regardless that the period of work done on that day is less than the normal hours of work.

 

Overtime Work 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 that is not less than 3 times the hourly rate of pay. If any such holiday falls on a half working day, the ordinary rate, or 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 under the terms of the agreement with the employer but such employee shall not be entitled to receive an increased rate of any housing allowance or food allowance. § 60D of Malaysia Employment Act, 1955. 

Annual Leave

An employee is entitled to paid annual leave of – 

      • 8 days for every 12 months of continuous service if the employee has been in employment for a period of fewer than 2 years;
      • 12 days for every 12 months of continuous service if the employee has been in employment for a period of two years or more but less than 5 years; and
      • 16 days for every 12 months of continuous service if the employee has been in employment for a period of 5 years or more.

The paid annual leave to which an employee is entitled shall be in addition to rest days and paid holidays. 

 

For an employee who has not completed 12 months of continuous service with the same employer during the year in which his contract of service terminates, the entitlement to paid annual leave shall be in direct proportion to the number of completed months of service. However, 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 is absent from work without the permission of the employer and without reasonable excuse for more than 10 percent of the working days during the 12 months of continuous service in respect of which the entitlement to such leave accrues, shall not be entitled to such leave.

 

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 considered to have not been taken in respect of the days for which sick leave or maternity leave is so granted.

 

Timing of Leave

The employer shall grant and the employee shall take such leave not later than 12 months after the end of every 12 months continuous service and any employee who fails to take such leave at the end of such period shall cease to be entitled to such leave.

However, an employee shall be entitled to payment in lieu of such annual leave if, at the request of the employer, the employee agrees in writing not to avail of any or all of annual leave entitlement.

 

Pay

An employee shall be paid at the ordinary rate of pay for each day of annual leave. Where an employee is granted a leave of absence without pay by the employer during any period of 12 months and the period of absence exceeds in the aggregate 30 days, that period of leave of absence shall not be considered for the purpose of computing the employee’s length of service with the employer.

 

Termination of Employment

An employee whose employment relationship has been terminated shall be entitled to be paid at the ordinary rate of pay for the amount of annual leave not taken. § 60E of Malaysia Employment Act, 1955.

Minimum Wage

Effective February 1, 2020, the minimum wage is 1,200 ringgits (US$283) per month. 

 

The minimum wage may not be up to date & is subject to change. Please click on this link for current rates.

Special Leave

Sick Leave

An employee shall be entitled to paid sick leave after examination at the expense of the employer by a registered medical practitioner duly appointed by the employer –

 

Where no hospitalization is necessary –

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

Of 60 days in the aggregate in each calendar year if hospitalization is necessary, as may be certified by such registered medical practitioner or medical officer.

 

However, the total number of days of paid sick leave in a calendar year to which an employee is entitled shall be 60 days in the aggregate. An employee who absents on sick leave which is not certified by a medical practitioner or which is certified by the medical practitioner but without informing the employer within a period of 48 hours of the commencement shall be considered to be absent without permission and without reasonable excuse in respect of the days on which the employee took sick leave.

 

Pay – 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

Female employees are entitled to 90 consecutive days of paid maternity leave for each child up to 5 children, starting as early as 30 days before childbirth and no later than the day after the birth of the child.  If a doctor certifies that an employee is unable to perform the duties satisfactorily due to advanced pregnancy, an employer may require that the employee begin maternity leave up to 14 days before the due date.

 

An employee who takes leave on a date earlier than the period of 30 days immediately preceding the childbirth shall not be considered as maternity leave and the employee will not be entitled to maternity leave allowance. 

 

Pay – A female employee shall be entitled to receive maternity allowance for the eligible period from her employer if–

      • Have been employed by the employer at any time in the 4 months immediately before the date of delivery; and
      • Have 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 the date of delivery. 

Payment of allowance to the nominee on death of a female employee 

If a female employee, after giving notice to the employer regarding the maternity leave and dies from any cause during the eligible period, the 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 the employee or, if there is no such person, to employee’s legal personal representative, an allowance at the rate calculated or prescribed from the day the employee commenced her maternity leave to the day immediately preceding the death. § 37- 42 of Malaysia Employment Act, 1955.