Legislation Relating to Payment of Wages and Working Hours

Summary of Employment Laws in Malaysia

EMPLOYMENT ACT, 1955

The Employment Act, 1955 is the main legislation on labour matters in Malaysia.

The Employment Act provides minimum terms and conditions (mostly of monetary value) to certain category of workers:

1. Any employee as long as his month wages is less than RM2000.00 and
2. Any employee employed in manual work including artisan, apprentice, transport operator, supervisors or overseers of manual workers, persons employed on vessels and even domestic servants are classified as employees even if their wages is more than RM2000.00 per month.

Paid maternity leave	:	60 days
Normal work hours	:	Not exceeding eight hours in one day or 48 hours in one week
Paid holiday	:	At least 11 gazetted public holidays ( inclusive of five compulsory public holidays; National Day, Birthday of the Yang Dipertuan Agong, Birthday of Ruler/Federal Territory Day, Labour Day and Malaysia day) in one calendar year and on any day declared as a public holiday under section 8 of the Holiday Act 1951

Paid annual leave for employees:
Less than two years of service	:	8 days
Two or more but less than five years of service	:	12 days
Over five years of service	:	16 days

*Minimum paid annual leave to be provided for employees

Paid sick leave per calendar year:
Less than two years of service	:	14 days
Two or more but less than five years of service	:	18 days
Over five years of service	:	22 days
Where hospitalisation is necessary	:	Up to 60 days (inclusive of the paid sick leave entitlement stated above)

*Minimum paid sick leave to be provided for employees

Payment for overtime work:
Normal working days	:	One-and-a-half times the hourly rate of pay
Rest days	:	Two times the hourly rate of pay
Public holidays	:	Three times the hourly rate of pay

Source: Ministry of Human Resources – www.mohr.gov.my

Children and Young persons (Employment) Act 1966

• To prevent the exploitation of child labour
• Under 14 years – only light work in family’s business
• 14-16 years – In light work that does not involve the use of machinery
• A maximum of 7 hours per day
• Only able to work between 8am – 6pm

Employment (Restriction) Act 1968

• Non-Malaysian citizens are required to obtain a valid work permit before they can be employed locally.
• Working without a valid work permit is strictly illegally under the Immigration Act 1966.

Minimum Wages Order 2016

• Minimum wage has been implemented in 2013 and has been closely observed thereafter.
• Minimum wages is basic wages, excluding any allowances or other payments.

MINIMUM WAGES RATE (as per Minimum Wages Order 2016)
Regional areas	Monthly	Hourly	Daily
			Number of days worked in a week
			6	5	4
Peninsular Malaysia	RM1,000	RM4.81	RM38.46	RM46.15	RM57.69
Sabah, Sarawak and Labuan	RM920	RM4.42	RM35.38	RM42.46	RM53.08

• The Minimum Wages Policy also applies to employees who are paid on piece-rates, tonnage, trip- or commission-based. Employers are required to supplement the wages of these employees if their income does not meet RM1,000 per month for Peninsular Malaysia and RM920 for Sabah, Sarawak and Labuan.

Source: Ministry of Human Resources Malaysia