Employment Law in Malaysia: A Comprehensive Guide to Rights, Contracts, and Compliance

BY Employment Law Malaysia

Understanding Employment Law in Malaysia: Legal Protections, Responsibilities & Key Regulations

Introduction to Malaysian Employment Law

Employment law in Malaysia, particularly for the private sector, is governed by the Employment Act 1955 (EA), which applies to Peninsular Malaysia and the Federal Territory of Labuan. This law is supported by other statutes such as the Industrial Relations Act 1967, case law, and supplementary regulations. Significant amendments to the EA are currently pending, and this guide outlines the core provisions under the existing framework before the changes are formalized.

For public sector employees, different regulations apply under the purview of the Public Service Commission.

Primary Sources of Employment Law in Malaysia

Employment rights in Malaysia are derived from multiple legal sources:

Key Statutes:

• Employment Act 1955

• Industrial Relations Act 1967

• Holidays Act 1951

• Weekly Holidays Act 1950

• Minimum Retirement Age Act 2012

• Employees Provident Fund Act 1991 (EPF)

• Social Security Organization Act 1969 (SOCSO)

• Employment Insurance System Act 2017 (EIS)

• Children and Young Persons (Employment) Act 1966

• National Wages Consultative Council Act 2011

Subsidiary Legislation:

• Employment (Part-Time Employees) Regulations 2010

• Minimum Wages Order 2016

Judicial Decisions:

• Case law continues to evolve the interpretation and enforcement of labour law Malaysia.

Scope and Applicability of the Employment Act 1955

The EA protects certain categories of employees, specifically:

• Individuals earning not more than RM2,000/month

• Manual laborers and supervisory personnel

• Domestic servants and seamen on Malaysian vessels

Employees not covered by the EA are instead governed by the terms of their employment contract in Malaysia.

Core Provisions of Malaysian Employment Law

1. Employment Contracts

All employment agreements, verbal or written, must comply with the EA. Any clause less favorable than EA standards is void (Section 7). Contracts exceeding one month must be in writing and contain a termination clause (Section 10).

2. Wages and Payment

Wages must be paid no later than the 7th day after the end of the wage period (Section 19). Wages include fixed payments but exclude allowances or lawful deductions.

3. Statutory Contributions

Employers are legally required to contribute to:

• EPF (Retirement savings)

• SOCSO (Social security)

• EIS (Unemployment benefits)

• Income Tax via PCB (Schedular Tax Deduction)

4. Working Hours and Overtime

• Max: 8 hours/day or 48 hours/week (Section 60A)

• Overtime pay: 1.5 times hourly wage

5. Leave Entitlements

• Annual Leave: 8–16 days based on tenure

• Sick Leave Malaysia: 14–22 days + 60 days hospitalization

• Maternity Leave Malaysia: 60 days paid leave (Section 44A)

6. Public Holidays

Employees are entitled to 11 paid public holidays. If required to work, the employee must be compensated at triple the daily wage.

7. Termination and Retrenchment

All terminations must be based on just cause or excuse (Industrial Relations Act 1967). Compensation:

• 10 days per year for <2 years

• 15 days per year for 2–5 years

• 20 days per year for >5 years

8. Sexual Harassment and Misconduct

Sections 81A–81G of the EA mandate investigation into sexual harassment complaints. Inaction may result in fines of up to RM10,000.

Specialized Topics in Employment Law Malaysia

• Unfair dismissal Malaysia: Redress available via Industrial Court.

• Probation Period: Commonly 1–6 months; dismissals must be justified.

• Restraint of Trade Clauses: Invalid under Section 28 of the Contracts Act 1950.

Local Support and Legal Consultation

If you're asking, "What are my rights if I am fired in Malaysia?" or "What is the Malaysian employment act?", you need reliable legal assistance. Employment law issues can include:

• Salary disputes Malaysia

• Overtime pay Malaysia

• Discrimination at work Malaysia

• Workplace harassment Malaysia

• Termination of employment Malaysia

• Retrenchment law Malaysia

For guidance, contact Employment Law Malaysia, offering services such as:

• Employment lawyer Malaysia consultation

• Employee rights in Malaysia enforcement

• Employment lawyer near me Malaysia referrals

• Industrial relations Malaysia representation

• Employment contract lawyer Malaysia services

• Wrongful dismissal lawyer Malaysia assistance

• Labour law Malaysia compliance advisory

Conclusion

Whether you're an employer or employee, understanding your obligations and entitlements under employment law Malaysia is crucial. For reliable legal solutions on employment rights, sick leave, maternity leave, termination, or harassment, consult Employment Law Malaysia for expert advice and representation.

Need Help? Contact Us

📱 WhatsApp: +6011-1630-0091📧 Email: general@employmentlawmalaysia.com

Get expert support from top employment and labour lawyers in Malaysia. Book a free consultation today.