According to the Department of Statistics’ 2020 Salaries and Wages Report, the median income in Malaysia in 2020 for high-skilled, semi-skilled, and low-skilled employees was RM4,011, RM1,593, and RM1,274 correspondingly. Based on the national median income, the RM1,500 pay floor delivers the highest salary boost for low-skilled workers, who account for 8% (about 750,000) of Malaysia’s 9.4 million people in paid employment.
However, the RM1,500 pay threshold affects low-skilled workers differently in various states. In Johor and Kuala Lumpur, the median pay for this category is close to or surpasses RM1,500. Given that the four states listed above account for around one-third of all low-skilled workers, a rough estimate estimates that only two-thirds of the nation’s 750,000 low-skilled workers will benefit from the wage increase.
Under his service contract, an employee is NOT obligated to work:
More than 5 hours without a break of at least 30 minutes; more than 8 hours a day; more than 10 hours in one day; Over 48 hours in one week Special limits, regarded as protective rules, apply to women working in the industrial or agricultural sectors. They are not allowed to labor between the hours of 10 p.m. and 5 a.m.
Overtime labor performed outside of normal working hours shall be compensated at a rate not less than one and one-half times the employee’s hourly rate of pay, regardless of the basis on which his or her rate of pay is determined. This implies that the agreed-upon workweek must be in writing, and any hours spent beyond that period must be compensated at the approved overtime rate.
Section 60E provides that an employee is entitled to a minimum paid yearly leave of:
|➤ 8 Days: Employed for a period of less than 2 years|
|➤ 12 Days: Employed for a period of 2 years or more but less than 5 years|
|➤ 16 Days: Employed for a period of 5 years of more|
Each state and federal territory has declared four to six state public holidays as of 2020, increasing the total number of (federal and state) public holidays to 20 in Sabah and Terengganu, 19 in Labuan, Penang, and Sarawak, and 18 in the remainder of the country.
Employees of EA are entitled to the following sick leave when no hospitalization is required:
|➤ 14 days in total in each calendar year if the employee has been with the company for less than two years|
|➤ If the employee has been with the company for two years or more but less than five years, he or she is entitled to 18 days of vacation every calendar year|
|➤ If the employee has been with the company for 5 years or more, he or she is entitled to 22 days in total every calendar year|
The Labour Relations Act (IRA) 1967 and the Employment Act 1955 govern employer-employee interactions in Malaysia.
Many people consider that the process for terminating an employee in Malaysia is excessively pro-employee. Some overseas enterprises are also concerned about a system that is viewed as unfair to employers when it comes to job termination. Malaysian labor law and termination of employment are based on fairness. It aims to strike a compromise between employee tenure security and employers’ rights or prerogatives to fire employees. Employers can fire an employee without causing unjust consequences to either the employer or the employee if they follow the proper procedures.
Termination letter must occur for “good reason or excuse.” There is no set or exhaustive list of appropriate grounds for an employer to terminate employment, although common causes include misbehavior, poor performance, redundancies, or business closure.
Employees (both EA and non-EA) are protected from wrongful termination.