To prevent companies in Malaysia from mistreating and/or exploiting their employees, labour laws are established. Such laws grant the employees the rights to be employed in a fair and respected manner, and this applies to local workers and foreign talents who are working in the country.
The primary employment and labour laws in Malaysia include, among others:
What are the Employment Laws in Malaysia?
There are a few Acts and Orders under the Employment laws in Malaysia. The most common employment laws in Malaysia include:
1. The Employment Act of 1955
This the primary law governing employment in Malaysia, and it protects any employee who falls under the First Schedule. After the 2022 amendment, the First Schedule includes not only employees earning less than RM2,000 per month or those involved in manual labour, but also those who enter contracts of service, subject to the Excluded Sections (S.60(3), S.60A(3), S.60C(2A), S.60D(3), S.60D(4) and S.60(J)).
This is an updated table on rights entitled to as a foreign worker, taking into account the Amendments to the Employment Act starting from 1 Jan 2023:
|Payment of Wages
||Employees must be paid within 7 days after the last day of the wage period.
(Section 18 & 19)
||Employees cannot work more than 5 hours consecutively without a minimum rest time of 30 mins
Employees also cannot work for more than 8 hours a day, more than 45 hours a week, excluding mealtime.
|Annual leave entitlement
||The number of paid annual leave allowed is based on the employee’s number of years of employment:
< 2 years: 8 days
>2 years, < 5 years: 12 days
>5 years: 16 days
|Medical leave entitlement
||The number of paid sick leave (not including Hospitalisation) allowed is based on the employee’s number of years of employment:
< 2 years: 14 days
>2 years, < 5 years: 18 days
>5years: 22 days
Hospitalisation: 60 days
||Maternity leave: 98 days
Paternity leave: 7 days
It is also to note to employers that in the past, the Act only required employers to provide the Director General with details about the foreign employee within 14 days of their commencement of employment. Currently, getting prior approval of the Director General is mandatory before employers can hire a foreign employee.
As per Section 99A of the Employment Act, anyone who commits an offence under this act, or fails to follow the provisions of the act could face a fine of up to RM 100,000, imprisonment for a maximum of five years, or both penalties combined.
2. The Industrial Relations Act 1967
The Industrial Relations Act is applicable to every employee in Malaysia as well and it governs the relationship between employee and employers. It also specifies regulations and assists the settlements of any dispute that arises between employee and employers.
3. Trade Union Act 1959
This governs trade unions, protecting the rights and liabilities of all members of trade unions in the country.
4. Employee’s Provident Fund Act 1991 (EPF Act)
For the EPF Act, it requires all employers and their employees to contribute a certain amount from their salary to the EPF. This is similar to the Employee’s social security Act 1969 which provides social security from employers and employees by imposing compulsory rates. These Acts require both employees and employers to contribute funds at a certain prescribed rate.