Employee Rights in Malaysia

The Employment Act 1955 (EA 1955) is the baseline labour law for the private sector in Peninsular Malaysia and Labuan (Sabah and Sarawak have their own Labour Ordinances). Following the Employment (Amendment) Act 2022, which took effect on 1 January 2023, the Act now covers every employee who has entered into a contract of service, regardless of how much they earn — the old RM2,000 wage cap is gone.

But coverage is not identical for everyone. Some provisions are restricted for employees earning more than RM4,000 a month, namely:

• Overtime pay (Section 60A)
• Rest-day and public-holiday overtime pay
• Termination and lay-off benefits

These restrictions don't apply to "specified employees" in the First Schedule (e.g. manual workers, drivers, supervisors of manual workers, domestic employees).

So a software engineer earning RM8,000 is covered by the Act (leave, maternity, notice, harassment protection) but is not statutorily entitled to overtime pay — that becomes a matter of contract. The Act sets minimum standards: a contract can offer better, but any term less favourable than the Act is void to that extent.

Paid leave scales with length of continuous service. Annual leave is set by Section 60E, sick leave by Section 60F.

Annual leave (per 12 months of continuous service):

Sick leave (paid, per year, where no hospitalisation):

Where hospitalisation is necessary, you may take up to 60 days of paid sick leave per year. The total paid sick leave in a year (non-hospitalised + hospitalised) does not exceed 60 days combined. Sick leave must be certified by a registered medical practitioner or dental surgeon — where practicable, one appointed by the employer. These are statutory minimums; employers commonly grant more, never less.

Normal hours. The 2022 amendment cut the maximum normal working week from 48 to 45 hours. An employee generally should not work more than 8 hours a day, or more than 5 consecutive hours without a break.

Overtime (for employees entitled to it — broadly those earning RM4,000 or less, or in First Schedule roles):

Rest day. Every employee is entitled to at least one rest day per week (Section 59). Total overtime is capped at 104 hours per month.

This is where the RM4,000 threshold bites: higher earners outside First Schedule roles rely on their contract for overtime, not the Act. A common myth is that the 2022 amendment gave everyone overtime — it did not.

Under Section 60D, every employee is entitled to a minimum of 11 paid gazetted public holidays a year, plus any day declared a holiday under the Holidays Act 1951.

Of these 11, 5 are compulsory:

• National Day (31 Aug)
• Birthday of the Yang di-Pertuan Agong
• Birthday of the Ruler / Yang di-Pertua Negeri of the state (or Federal Territory Day for FT employees)
• Workers' Day (1 May)
• Malaysia Day (16 Sep)

The employer chooses the remaining holidays (commonly major festival days — Hari Raya, Chinese New Year, Deepavali, Christmas) and must notify employees. If a public holiday falls on a rest day, the next working day becomes a paid holiday. If you are required to work on a public holiday, you get the holiday pay plus at least two days' wages at the ordinary rate (and 3× the hourly rate for any overtime that day).

Maternity leave. Since 1 January 2023, eligible female employees get at least 98 consecutive days of paid maternity leave per confinement (raised from 60), subject to the general entitlement of up to five surviving children.

To qualify for maternity allowance, you must generally have been employed at any time in the 4 months before confinement and for at least 90 days in total during the 9 months immediately before confinement.

Maternity protection. The Act now prohibits terminating a pregnant employee (or one with a pregnancy-related illness) during pregnancy or maternity leave — except for wilful breach of contract, misconduct, or closure of the business. The burden is on the employer to justify.

Paternity leave. The 2022 amendment introduced 7 consecutive days of paid paternity leave. To qualify, the male employee must be legally married to the mother and have been employed by the same employer for at least 12 months, limited to 5 confinements. These are statutory minimums; many employers offer more.

The 2022 amendment added Sections 60P–60Q, giving employees a statutory right to apply for a flexible working arrangement (FWA) — a change to the hours, days or place of work (for example remote or hybrid work, or shifted hours).

How it works:

• You make the application in writing.
• The employer must respond in writing within 60 days.
• If the employer refuses, it must state the grounds.

What the law does not do: it does not guarantee approval, and there's no statutory appeal. So this is best understood as a right to request and get a reasoned, time-bound written answer — not a right to be granted flexible work. Still useful: putting the request in writing forces a documented response rather than an informal "no". Keep a copy of your request and the reply.

Notice (Section 12). Either party may end the contract with written notice. If the contract is silent, the statutory minimum applies:

A contract may specify a longer period (the same for both sides). Either party may pay wages in lieu of notice for the un-served portion.

Termination & lay-off (retrenchment) benefits. Under the Employment (Termination and Lay-Off Benefits) Regulations 1980, an employee with at least 12 months' continuous service whose contract is terminated (including retrenchment) gets minimum benefits:

Incomplete years are pro-rated. These are not payable if you resign, are dismissed for misconduct (after due inquiry), or reach the contractual retirement age. As with overtime, statutory entitlement can be restricted for employees earning over RM4,000/month outside First Schedule roles.

Three statutory contributions are deducted from or paid on most employees' wages.

EPF / KWSP (retirement savings) — for members below 60: - Employee: 11% of monthly wages - Employer: 13% (wages ≤ RM5,000) or 12% (wages > RM5,000) - Reduced rates apply at 60+. Foreign workers are being phased into mandatory EPF.

SOCSO / PERKESO (social security) — wage ceiling RM6,000/month (raised from RM5,000 on 1 October 2024): - Employment Injury + Invalidity Scheme: employer ~1.75%, employee 0.5%.

Contributions are mandatory; the employer deducts your share and remits both on time. Rates and ceilings are reviewed periodically — confirm the current figures on the KWSP and PERKESO portals. If you lose your job, you may claim EIS benefits and re-employment support from PERKESO.

Sexual harassment. The EA 1955 requires an employer to inquire into any complaint of sexual harassment. The 2022 amendment raised the penalty for failing to inquire (or to give written reasons for refusing) to a fine of up to RM50,000, and now requires every employer to display a notice raising awareness at the workplace. The separate Anti-Sexual Harassment Act 2022 also created a Tribunal for Anti-Sexual Harassment.

How to file a complaint:

• Wages, leave, benefits, harassment-inquiry disputes → lodge with the Department of Labour (Jabatan Tenaga Kerja, JTK), heard at the Labour Court before the Director General of Labour. File online via the MOHR/JTK portal or at the nearest labour office.
• Unfair / wrongful dismissal → governed by the Industrial Relations Act 1967, not the Labour Court. You must make a representation to the Director General of Industrial Relations within 60 days of dismissal, seeking reinstatement; unresolved cases may go to the Industrial Court.

Keep your contract, payslips and written communications — they are your evidence.