What you need to know for employing in Malaysia

Employee contributions include SOCSO and EPF.

Working Hours:  

Maximum weekly working hours - 45 hours.

A working day should not have more than 8 working hours.

No more than 5 consecutive hours without period of rest/leisure (no less than 30 minutes).   

Non-EA employees: Working hours freely negotiated and agreed between the parties.  

Overtime:  

EA employees entitled to overtime benefits at rate of no less than 1.5 times their hourly rate of pay. Overtime benefits at rate of no less than 3.0 times their hourly rate of pay for overtime on public holidays.  

Non-EA employees: uncommon to be paid overtime, depends on the common practice in the specific industry.

Working on Public Holiday:

All employees cannot work over 45 hours per week. So long as they don’t go over the limit, working on a public holiday is possible.

An employee who works on a public holiday will be treated to have worked overtime.

If employee earns more than RM 4,000 per month → no overtime payment required

If employee earns less than RM 4,000 → overtime payment required.

Omnipresent does not support overtime as payroll has no capacity. But for your informational purposes:

• Overtime pay on public holiday for the first 8 hours = Monthly rate of pay / 26 * 2

Overtime pay on public holiday for the hours that follow = Monthly rate of pay / 26 / 8 * number of hours worked

Employees subject to Employment Act (EA) regulations are entitled to the following sick leave periods:

• 14 days for employees with less than 2 years' service.

• 18 days for employees with over 2 years but less than 5 years' service.

• 22 days for employees with 5 years' service or more.

• 60 days in the aggregate of each calendar year if hospitalization is necessary for the employee and certified by a medical practitioner.

Maternity leave: All female employees employed by the employer will benefit from 98 days of maternity leave.

Paternity leave: 7 consecutive days of paid paternity leave (for up to five births) for married male employees.

Employees subject to Employment Act (EA) regulations are entitled to the following vacation times: 

• 8 working days for every 12 months of continuous service with the same employer, if employed for a period of fewer than 2 years.

• 12 working days for every 12 months of continuous service with the same employer, if employed for 2 years but fewer than 5 years.

• 16 working days for every 12 months of continuous service with the same employer, if employed for 5 years or more.

Non-EA employees may freely negotiate vacation times with the relevant employer.

The employer must provide the employee with a termination notice stating the reasons for termination (just cause).

The commonly recognized categories of just cause are retrenchment, misconduct, or poor work performance.

While employers are not required to obtain government approval for termination, written notice of termination must be sent to the relevant governmental authorities.

All employees (regardless of their wage and designation) can bring an unfair dismissal claim. To avoid that, it is recommended, for example, in a case of termination on the grounds of poor performance, sufficient written warnings, time, and guidance to improve performance should be given to the employee.