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Understanding employee entitlements is essential for both employers and employees to ensure compliance with Malaysian labour laws and promote a fair, productive workplace.
Under the Employment Act 1955 and related regulations, all employees in Malaysia are entitled to a range of mandatory benefits that cover wages, leave, social security, and working conditions.
This article provides an overview of these key benefits, helping businesses meet their legal obligations and employees understand their rights.
1. Wages and Overtime
- Timely Payment of Wages: Salaries must be paid no later than the 7th day of the following month.
- Overtime Pay:
- Normal workday: 1.5x hourly rate
- Rest day: 2x hourly rate
- Public holiday: 3x hourly rate
2. Working Hours & Rest Days
- Normal working hours: Maximum of 45 hours per week.
- Rest day: At least 1 rest day per week.
- Break time: Minimum 30 minutes after 5 consecutive hours of work.
3. Public Holidays
- Employees are entitled to at least 11 paid public holidays annually (5 of which must be:
- National Day
- Birthday of the Yang di-Pertuan Agong
- Birthday of the Ruler (state-based)
- Labour Day
- Malaysia Day
4. Annual Leave
- Based on length of service:
- 1–2 years: 8 days/year
- 2–5 years: 12 days/year
- >5 years: 16 days/year
5. Sick Leave
- Without hospitalization:
- <2 years: 14 days
- 2–5 years: 18 days
- >5 years: 22 days
- With hospitalization: Up to 60 days per year (inclusive of normal sick leave)
6. Maternity Leave
- 98 consecutive days of paid maternity leave (effective 2023)
- Applies to all female employees, regardless of salary level
An employee is required to give prior notice to her employer to be entitled to paid maternity leave under the Employment Act 1955.
Requirements:
To qualify for maternity leave and maternity allowance (paid leave), the employee must:
- Notify the employer of her pregnancy and expected maternity leave:
- The notice must be given at least 60 days before the expected confinement date.
- It can be given before or after the birth, but it must be done within 60 days after delivery if not given earlier.
- Be employed at any time during the 4 months immediately before confinement.
Failure to give notice:
If the employee does not give the required notice, she may still be entitled to maternity leave but not to the maternity allowance (paid leave), unless the employer chooses to waive the notice requirement.
7. Paternity Leave
- 7 days of paid paternity leave for married male employees (effective January 2023), limited to 5 births.
8. EPF (Employees Provident Fund)
- Employer contribution: 12% or 13% (depending on employee’s wage)
- Employee contribution: 11%
- Mandatory for all Malaysian citizens and permanent residents.
9. SOCSO (Social Security Organisation)
- Covers:
- Employment Injury Insurance Scheme
- Invalidity Pension Scheme
- Contributions are shared between employer and employee, based on salary.
10. EIS (Employment Insurance System)
- Provides financial assistance for retrenched employees.
- Both employer and employee contribute 0.2% of wages monthly.
11. HRDF (Human Resources Development Fund)
- Applicable to employers in specific sectors with 10 or more employees.
- Employers contribute 1% of monthly wages for training and development.
Note:
- Foreign workers are not entitled to EPF unless voluntarily registered, with employees contributing 11% and employers RM5 monthly.
This has now changed with the passing of the Employees Provident Fund (Amendment) Bill 2025 by the Dewan Rakyat on March 6, 2025.
EPF contributions will become mandatory for foreign employees in Malaysia starting in the fourth quarter of 2025.
Read more - Benefits under the Employment Act mainly apply to employees earning RM4,000.00 per month and below, but employers often extend similar benefits to all employees for consistency and retention.