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Malaysia’s Employment Act (1955): A Short Guide

Published 29 Jul 2022
Two employees smiling and looking at a phone in the office

Hiring employees in Malaysia, but unsure of the terms and benefits to offer? As an employer or business owner in Malaysia, you’ll want to understand the Malaysia Employment Act (1955) clearly to ensure compliance.

This short guide will give you a broad overview of all the key aspects to consider, as well as how the recent changes made to minimum wage and other aspects from the Employment (Amendment) Act 2022 may affect you. 

In this guide, we cover the important aspects of Malaysia employment law, including:

  • What is Malaysia’s Employment Act
  • Employees that don’t fall under the Employment Act
  • The current minimum wage in Malaysia
  • Required statutory deductions from an employee’s salary
  • Minimum requirements for annual leave
  • Minimum requirements for sick leave
  • Public holidays
  • Overtime rates
  • Maternity leave and protections
  • Working hours
  • Sexual harassment complaints
  • Flexible work arrangements

What is Malaysia’s Employment Act (1955)?

The Employment Act (1955), also known as the EA, is an act which outlines the rights of employees and employers and their obligations under the law.

The EA does not cover every single employee in Malaysia, but it does cover the majority of employees and is the main legislation on employment matters in Malaysia.

Who is covered under the Employment Act (1955)?

It applies to:

  • Employees in the private sector;
  • Employees whose monthly salary does not exceed RM2,000;
  • Employees who are engaged in manual labour, regardless of salary;
  • Employees engaged in the operation or maintenance of mechanically propelled vehicles, regardless of salary;
  • Employees who supervise or oversee other employees engaged in manual labour, regardless of salary;
  • Employees engaged in any capacity on a vessel, regardless of salary; and Domestic servants

The Employment Act is not applicable to Sabah and Sarawak, as they have their own Labour Ordinances respectively.

Note: Although the Employment (Amendment) Act 2022 was slated to come into effect from 1st Sept 2022, enforcement of amendments have been postponed to 1st Jan 2023 instead — this was decided by the Cabinet after industries and employers have unanimously asked for the postponement.

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