Malaysia

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Country Snapshot

The GPS Country Snapshot includes 25 sections of information about labor law compliance in Malaysia. See a sample of popular sections below.

Termination of Employment

Per Malaysian labor law, the required notice period must be included in any written contract of employment and must be the same for both the employer and the employee. The minimum statutory length of the notice period must be as follows:

  • 4 weeks if the employee has been employed for less than 2 years
  • 6 weeks if the employee has been employed for 2 years or more, but less than 5
  • 8 weeks if the employee has been so employed for 5 years or more.

A notice period is not required for termination of an employment contract in the event of any willful breach of a condition of the contract by the other party or in the event of gross misconduct by the employee.

Work Permits

Malaysia recognizes 2 categories of non-citizen employees: expatriates and foreign workers. Generally, expatriates are skilled workers, and foreign workers are unskilled laborers.

All non-citizens who wish to work in Malaysia must apply for an employment pass, which must be issued before employment commences. The pass is valid for up to 5 years and may be extended or renewed. In order to hire foreign nationals, the employer must inform the government of the details of employment. Applications are submitted to the Expatriate Committee.

Paid Annual Leave

Beginning January 1, 2023, female employees in Malaysia are entitled to 98 days of maternity leave. Passed in March 2022, Act 265 increases the length of maternity leave. Additional protections are in place for pregnant employees by prohibiting companies from terminating employees who are pregnant or have pregnancy-related illnesses. 

An employee is entitled to a maternity allowance if she has been employed at any time in the 4 months leading up to her confinement, and for a total of at least 98 days in the nine months before confinement. An employee is not eligible for a maternity allowance if, at the time of confinement, she has 5 or more living biological children. The maternity allowance is equal to the daily wages of the employee. The employer pays the total cost of the maternity allowance.

Maternity leave can begin no earlier than 30 days before confinement, and no later than one day after confinement.

Working Hours

Effective January 1, 2023, working hours are 45 hours per week. A full working day is 8 hours but an employer may require an employee to work up to 10 hours depending on business needs. An employer and employee may agree in the employment contract that the employer can require the employee to work in excess of 45 hours per week, but in no case may the average work hours exceed 45 in a 3-week period. 

An employee may apply for a flexible working arrangement to vary the hours of work, days of work, or place of work concerning their employment. In cases where there are applicable collective agreements, any application made by the employee must be consistent with the terms and conditions in the collective agreement.

Maternity Leave

Beginning January 1, 2023, female employees in Malaysia are entitled to 98 days of maternity leave. Passed in March 2022, Act 265 increases the length of maternity leave. Additional protections are in place for pregnant employees by prohibiting companies from terminating employees who are pregnant or have pregnancy-related illnesses. 

An employee is entitled to a maternity allowance if she has been employed at any time in the 4 months leading up to her confinement, and for a total of at least 98 days in the nine months before confinement. An employee is not eligible for a maternity allowance if, at the time of confinement, she has 5 or more living biological children. The maternity allowance is equal to the daily wages of the employee. The employer pays the total cost of the maternity allowance.

Maternity leave can begin no earlier than 30 days before confinement, and no later than one day after confinement.

Minimum Wage

Minimum wages are determined by the government, in consideration with recommendations from the National Wages Consultative Council. 

Effective July 1, 2023, the monthly minimum wage is MYR 1,500 (Malaysian ringgits) per month for all businesses that:

  • Employ 5 or more employees or
  • Carry out an activity classified under the Malaysian Standard Classification of Occupations (such as doctors, lawyers, engineers, etc.).

The daily minimum wage depends on the number of days worked per week.

Country Profile

The GPS Country Profile contains detailed information on over 60 topics related to labor law compliance within Malaysia.
  • Type of Employment Relationship
  • Permanent Employment
  • Fixed-Term or Specific-Purpose Contracts
  • Temporary Employment Contracts
  • Part-time Employment
  • Young Worker Employment
  • Vendors and Independent Contractors
  • Types of Contracts
  • Probationary Period
  • Termination of the Contract of Employment
  • Grounds for Termination
  • Notice of Dismissal
  • Fair Dismissal
  • Redundancy
  • Unfair Dismissal
  • Suspension of Contract of Employment
  • Severance Benefits
  • Hours of Work
  • Work Week and Timekeeping
  • Night Work and Shift Work
  • Overtime
  • Remote Work
  • Required Time Off
  • Public Holidays
  • Annual Leave
  • Sick Leave
  • Maternity
  • Other Forms of Leave
  • Social Insurance and Retirement
  • Social Security Contribution
  • National Retirement Scheme
  • Dependents’/Survivors Benefit
  • Life and Disability Insurance/Benefit
  • Statutory Allowances
  • Compensation and Benefits
  • Minimum Wage (Basic Wage)
  • Bonuses, Profit Sharing and Other Compensation
  • Medical Insurance
  • Work Environment
  • Workplace Safety and Health
  • Prohibition of Discrimination
  • Prohibition of Harassment
  • Data Protection and Privacy
  • Whistleblowers and Retaliation
  • Workers’ representation in the organization
  • Freedom of Association
  • Registration and Recognition of Unions
  • Trade Union Personality
  • Collective Bargaining and Agreements
  • Disputes and Settlements
  • Strikes and Lockouts
  • Unfair Labor Practices
  • Taxation of Compensation and Benefits
  • Income Tax
  • Taxation of Employee Benefits
  • Tax Filing and Payment Procedures
  • Double Tax Relief and Tax Treaties
  • Visas and Work Permits
  • Visas
  • Work Permits and Residence Permits

 Country Snapshot

Get the full Country Snapshot with 25 sections of information about labor law in Malaysia.