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How Malaysia’s Labor Laws Apply to Foreign Workers

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How Malaysia’s Labor Laws Apply to Foreign Workers

2021-02-02T17:15:06+08:00December 10, 2019|6 Comments

All foreigners who work in Malaysia are protected by the country’s labor laws. It is important for foreign workers in Malaysia to know their rights to ensure that they are never exploited while on the job. If they are, they may proceed to take legal action against any offenders.

 How Labor Laws Apply to Foreign Workers in Malaysia

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.

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Rest Days and Holidays

Every employee in Malaysia has a right to one day of rest every week; such is expected to be offered by every employer in Malaysia. Every employee is entitled to a paid holiday at the ordinary pay rate on each official public holiday of every calendar year. Should any such public holidays fall on a non-working day, the working day which directly follows it will automatically be made a public holiday.

 

Authorities Which Enforce Labor Laws in Malaysia

In Malaysia, the Director-General of Labour has the power to investigate and enforce labor laws. This important figure is also mandated to handle issues of discrimination as well as any other complaints by foreign employees in the country. Other forms of misconduct overseen by the Director-General include sexual harassment as well as any breach of the employment contract.

An employment service officer is mandated to act in the capacity of inspecting, examining, and enforcing the EIS Act, while the Personal Data Protection authorities have the right to inspect, enforce, and investigate any relevant complaints on data and its misuse when they receive information about such cases.

 

Punishments for Violations of Labor Laws in Malaysia

There are punishments for noncompliance with labor laws in Malaysia. The general penalty is a fine of not more than RM10,000 on the occasion of the first offense. If the offender commits a continuing offense, a daily fine of not more than RM1,000 will be imposed. If an offense is repeated, the offender will either be sentenced to a five-year jail term or be forced to pay a fine of RM20,000.

 

Conclusion

In summary, Malaysian labor laws are clear but always under review. Everyone who works in the country contributes to the growth of the country’s economy and GDP. Therefore, whether they are locals, foreigners, or permanent residents, all workers in Malaysia have their rights protected so that they may improve their productivity. Malaysia protects its foreign workers just as it does its local employees.

How Malaysia’s Labor Laws Apply to Foreign Workers FAQs

What should a Foreign Worker in Malaysia do during a violation of rights?2020-04-29T11:41:18+08:00

If any foreigner feels that their rights have been violated, the foreigner may formally file a petition to the relevant authorities against the body, organization, or person at fault. One can file a complaint by sending an official letter in writing to a labor office or via email. It is also possible to file the complaint via telephone.

There must be supporting documents which accompany the complaint such as a letter of job offer or contract which was given at the time of hiring. Upon successful submission of the documents, the foreigner will receive an official notice from the labor department after investigations have been completed. In most instances, the labor office will contact the employer to inquire about your claims. If the employer agrees to the claim and chooses to make a settlement, the person who made the complaint will be required to withdraw the case against the employer. Otherwise, a lawsuit between the two will be heard in a labor court at a predetermined date. Both parties involved are to attend such a hearing.

How do Malaysia’s labor laws relate to the hiring of Foreign Workers?2020-04-29T11:40:28+08:00

Malaysian labor laws are constantly being reviewed by the government and other relevant authorities. The country intends to prioritize its citizens with regard to job opportunities in order to reduce the unemployment rate. Therefore, foreign workers will only be considered only if they offer services which are not offered by locals.

6 Comments

  1. Christa December 3, 2020 at 12:33 am - Reply

    Can an employment pass(category III) holder give birth in Malaysia? And what kind of pass can the newborn get?

    • Tiwi December 4, 2020 at 2:51 pm

      Hi, while there is no law saying that employment pass (category III) holders cannot give birth in Malaysia, employment pass (category III) holders are not allowed to bring dependents. Hence, the newborn will not be entitled to a dependent pass. All non-Malaysia newborn will get red color birth certificates.

      Please contact us via Paul Hype Page to discuss further.
      Thank you.

  2. Edna Jumadiao November 8, 2020 at 12:17 am - Reply

    Can a helper who’s almost finish her 2 years of contract,can ask her Employeer an EARLY RELEASE In any case? or need to have a Reasonable reason?

    • Tiwi November 13, 2020 at 3:39 pm

      Hi Edna, thanks for reaching out. This depends on your employer’s or agency contract. You should discuss reasonable terms.

      Please contact us via Paul Hype Page to discuss further.
      Thank you for your question.
      Warm regards
      Paul

  3. JOHAL September 18, 2020 at 9:38 am - Reply

    Can a legal foreign worker switch jobs to another company

    • Tiwi September 28, 2020 at 9:57 am

      Hi Johal,

      Yes. It is possible.

      Please contact us via Paul Hype Page to discuss further.

      Thanks

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