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Work & EmploymentEmployee Rights

Employment law in Malaysia is generally governed by the Employment Act 1955 (“Employment Act”). 

The Employment Act sets out certain minimum benefits that are applicable to employees. Employees whose monthly salary does NOT exceed RM2,000 is protected under the Employment Act whereas others are considered as the “Non-EA Employees” which will usually be governed by the terms of their contract of employment. However, most employers still use the Employment Act benefits as a guideline or “bare minimum”, even for the Non-EA Employees.  

The Employees Provident Fund (EPF) announced that for the year 2021, the employee’s share of the statutory contribution rate will be reduced from eleven (11) per cent to nine (9) per cent.

This new statutory contribution rate for employees applies only to members below 60 years old who are liable for contribution. For members aged 60 years old and above, the statutory contribution rate for employees remains unchanged.

The new rates will be in effect for an entire year, affecting wages for the months of January 2021 (February 2021’s contribution) up to December 2021 (January 2022’s contribution).

Members who wish to maintain the contribution rate for employees at 11 per cent may fill in the Borang KWSP 17A (Khas 2021) form, which will be made available on the EPF website (www.kwsp.gov.my) starting 1 December 2020. The completed form must then be submitted to their respective employers for online registration via i-Akaun (Employer), which will begin from 14 December 2020. Employers are also required to keep the form received for their record.

Under Section 60(1) of the Employment Act 1955:

60. (1) Except as provided in subsection 60A(2), no employee shall be compelled to work on a rest day unless he is engaged in work which by reason of its nature requires to be carried on continuously or continually by two or more shifts: 

Provided that in the event of any dispute, the Director General shall have power to decide whether or not an employee is engaged in work which by reason of its nature requires to be carried on continuously or continually by two or more shifts. 

And under Section 60(3) of the Employment Act 1955:

(3) (a) In the case of an employee employed on a daily, hourly or other similar rate of pay who works on a rest day, he shall be paid for any period of work— 

(i)  which does not exceed half his normal hours of work, one day’s wages at the ordinary rate of pay; or 

(ii)  which is more than half but does not exceed his normal hours of work, two days’ wages at the ordinary rate of pay. 

(b) In the case of an employee employed on a monthly or weekly rate of pay who works on a rest day, he shall be paid for any period of work— 

(i)  which does not exceed half his normal hours of work, wages equivalent to half the ordinary rate of pay for work done on that day; or 

(ii)  which is more than half but which does not exceed his normal hours of work, one day’s wages at the ordinary rate of pay for work done on that day. 

(c) For any work carried out in excess of the normal hours of work on a rest day by an employee mentioned in paragraph (a) or (b), he shall be paid at a rate which is not less than two times his hourly rate of pay. 

(d) In the case of an employee employed on piece rates who works on a rest day, he shall be paid twice his ordinary rate per piece. 

Under Section 60E an employee shall be entitled to a minimum paid annual leave of – 

Number of Leaves EntitledYears of Service
8 DaysEmployed for a period of less than 2 years
12 DaysEmployed for a period of 2 years or more but less than 5 years
16 DaysEmployed for a period of 5 years of more

Under Section 60E an employee shall be entitled to a minimum paid annual leave of – 

Number of Leaves EntitledYears of Service
8 DaysEmployed for a period of less than 2 years
12 DaysEmployed for a period of 2 years or more but less than 5 years
16 DaysEmployed for a period of 5 years of more

Where no hospitalization is necessary, an employee is entitled to:

Number of Sick Leave EntitledYears of Service
14 DaysEmployed for less than 2 years
18 DaysEmployed for 2 years or more but less than 5 years
22 DaysEmployed for 5 years or more
60 DaysIf hospitalization is necessary (certified by registered medical practitioner or medical officer)

And provided further that if an employee is certified by such registered medical practitioner or medical officer to be ill enough to need to be hospitalized but is not hospitalized for any reason whatsoever, the employee shall be deemed to be hospitalized for the purposes of this section. 

Under Section 60F of the Employment Act:

(1A) An employee shall also be entitled to paid sick leave which is certified by a dental surgeon as defined in the Dental Act 1971.

Any Employee who absents himself on sick leave without any Medical Certificate or failed to inform his employer of such sick leave within 48 hours of the commencement thereof, shall be deemed to absent himself from work without the permission of his employer and without reasonable excuse for the days on which he is absent from work. 

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