Malaysia’s Primary Labor Laws
There are many labor laws which exist in Malaysia today. These laws were created to protect the rights of everyone who works in Malaysia. The primary employment and labor laws in Malaysia include important pieces of legislation such as the Employment Act 1955, Industrial Relations Act of 1967, and Employees’ Provident Act, among others.
The Employment Act protects employees who earn a salary of less than RM 2,000 per month, manual laborers and their supervisors, as well as anyone who operates a machine which is mechanically propelled on behalf of a company. The Industrial Relations Act of 1967 is applicable to everyone who is employed in Malaysia. This Act governs the relationship between employers and their employees. It also specifies regulations which assist in the settlement of any disputes between employers and employees. The Trade Unions Act of 1959 governs all trade unions in Malaysia. It protects the rights and liabilities of all members of trade unions in the country.
The Employees’ Provident Fund Act 1991 is also known as the EPF Act. It requires that all employers and their employees contribute a certain amount of money towards the EPF. This amount of money is not allowed to be any less than the prescribed EPF rate. A related Act is the Employees’ Social Security Act 1969, which, as is implied by its name, provides social security for all employees in Malaysia. It collects funds for social security from employers and employees by imposing a mandatory contribution at a prescribed rate. The Employment Insurance System Act, which may also be referred to as the EIS Act, serves a role similar to that of an insurance policy which provides certain benefits such as re-employment in case of loss of the current job. This Act makes it mandatory for contribution for funds at a certain prescribed rate.
The Occupational Safety and Health Act 1994 is concerned with the protection of the welfare, health, and safety of all individuals in a certain workplace. The Minimum Wages Order 2018 prescribes the minimum wage that all employees in Malaysia are to receive, while the Minimum Retirement Age Act sets the minimum but not mandatory retirement age at the age of 60. According to this law, an employer is not allowed to retire an employee who is yet to reach such an age. However, optional early retirement by decision of the employee is permitted. One final labor law in Malaysia is the Personal Data Protection Act (PDPA). According to the PDPA, every employer in Malaysia must ensure that employees’ private data and sensitive information remains unaffected by any intruders.
How Malaysia’s Labor Laws Apply to Foreigners
Just as is the case with any other employee in Malaysia, foreign employees are entitled to protection provided by the Employment Act 1955. Any employer who withholds the salary of a foreign employee unlawfully has committed a crime which is punishable by law, and such crimes attract a fine of up to RM10,000. Any employer who breaches the conditions of service as per the agreement with any foreign employee, will be liable for prosecution in a court of law.
Foreign employees are also protected from mistreatment. In certain cases, reports have surfaced that reported that certain employers have confiscated passports and pretended to be holding them for safekeeping but are actually planning to gain full control over them. This then leads to these employees being threatened to deportation to make them submit to the employer’s demands. Furthermore, the immigrant department will not know whether the employer will give truthful information about the employees because the employer is holding the employees’ passports illegally. All foreign workers in Malaysia are legally protected from such incidents.
Another way by which Malaysia seeks to protect its foreign workers is by granting them legal documents so as to prevent human trafficking. These documents also help in tracking any breach of the employment contract of a legally-employed foreign employee in the country.
No employer is permitted to make a deduction from a foreigner employee unless permitted according to the stipulations specified in the employment laws of Malaysia. Such legitimate deductions include deductions made due to overpayments made within the last three months of the deduction, deductions for indemnity by the employee due to the employer as specified according to the law, deductions made from wages which have been given as an advance as long as the advance has not accumulated any interest charges, and any other deduction as required by written law or a court order. All wages are to be paid in legal tender so that they will not be null and void and therefore considered to be illegal. Payments in the form of cheques are also acceptable; these cheques are to be payable to the order of employees.
Employment of Female Foreign Employees
The employment of female foreign employees in Malaysia is subject to the same regulations as that of female employees who are Malaysian citizens. No female employee is expected to work any industrial or agricultural work from the evening hours until 5 a.m.
Every female employee, whether local or foreign, has a right to maternity leave for a period of at least 60 consecutive days as well as maternity allowance from the employer.