How Malaysia’s Labour Laws Apply to Foreign Workers

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:

There are a few Acts and Orders under the Employment and Labour laws in Malaysia, these include:

This the primary law governing employment in Malaysia, and it protects any employee who falls under the First Schedule. Employees earning less than RM 2,000 per month, manual labour, and anyone involved in the operation or maintenance of any mechanically powered vehicle are included in the First Schedule.

Some of the basic rights you are entitled to as a foreign worker includes:

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.

This governs trade unions, protecting the rights and liabilities of all members of trade unions in the country.

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.

This Act governs the welfare, health, and safety of all individuals in a certain workplace.

The Minimum Wage Order 2018 prescribes the minimum wage that all employees in Malaysia are to receive. The Minimum Retirement Age Act sets the minimum retirement age at the age of 60 and employers are unable to retire the employees below the minimum age of 60 unless early retirement by the decision of employee is permitted.

This Act governs the privacy of employee’s personal and any sensitive information.

Similar to any employees in Malaysia, foreign employees are entitled to all protections provided in the Employment Act 1955. Any employer holding the wages of employee unlawfully and commits a crime that breaches Employment Act 1955 will be fined up to RM 10,000 and will be liable for prosecution in the court of law.

Examples of mistreatments are as follows:

No employer is allowed to make a deduction from a foreigner employee unless the stipulations provided in Malaysia’s employment regulations allow it. These include:

As for female employees, they are entitled to maternity leave and allowance for a period of 60 days.

Every employee has the right to rest once every week and is entitled to a paid holiday at the ordinary pay rate on every public holiday in Malaysia of the calendar year. If a public holiday falls on a weekend, the next working day directly followed will be made a public holiday. The annual leave entitlement under the labour law is dependent on the number of years the employee has been with the company and ranges from 8 to 16 days a year.

Any noncompliance with the labour law will result in punishments in Malaysia. The general penalty is a fine not exceeding RM10,000 on the first offense. If repeated, the offender will be fined on a daily basis of not more than RM1,000 and will be sentenced to a five-year jail term or be forced to pay a fine of RM20,000.