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In a modern era and with the rise of Gen Z workforce, employee rights are essential to ensure fair treatment, job security and healthy work-life balance. The Employment Act 1955, especially following its 2022 amendment, serves as Malaysia’s principal legislation protecting workers in Malaysia.
Effective 1 January 2023, the amendment Act extends protections to nearly all private sector employees regardless of wage level (except certain exclusions). These changes bring Malaysia’s labour standard closer to international norms, such as those set by International Labour Organization (ILO). This article provides a clear overview of the mandatory benefits.
Who is Covered
As of 1 January 2023, the Act covers all employees in Peninsular Malaysia and Labuan, regardless of salary. However, employees earning above RM4,000/month are excluded from some provisions (e.g. overtime pay) except they are manual workers.
Termination of Contract
Job termination affects both employees and employers significantly. Clear procedures help reduce unfair dismissals and disputes.
Termination requires notice or payment in lieu, with the required notice period depending on years of service:
Minimum Wage
Malaysia has raised the national minimum wage from RM1,500 to RM1,700 per month, effective 1 February 2025 for employers with five or more workers. For smaller businesses with fewer than five employees, enforcement begins on 1 August 2025. The rate applies to both local and foreign workers, aiming to improve income levels and worker welfare.
Payment of Wages
Getting paid correctly and on time is a fundamental worker right.
Only lawful deductions are allowed, including
Working Hours
Limiting working hours protects employees from fatigue and supports better work-life balance.
Overtime
Overtime pay ensures employees are fairly compensated when working beyond normal hours.
Employees are entitled to overtime at:
Maximum overtime is capped at 104 hours/month
Rest Day
Rest days are vital for physical and mental recovery. Employees are entitled to at least one rest day per week. If they are required to work on their rest day, they must be paid according to rest day rates depending on the hours worked.
If required to work on a rest day, employees are entitled to
Annual Leave
Paid time off is essential for personal well-being and family commitments. Employees are entitled to annual leave based on their years of service:
Public Holidays
Recognizing public holidays fosters cultural respect and national unity. Employees are entitled to 11 paid public holidays, including 5 compulsory holidays. If they are required to work, they must be paid extra or granted a replacement holiday.
5 compulsory holidays must be observed:
Sick Leave
Illness can affect anyone and workers shouldn’t have chosen between pay and health. Post-amendment, sick leave and hospitalization leave are separated increasing total entitlements. Employees now receive:
Maternity Leave
Maternity protection is key to supporting women in the workplace and ensuring safe childbirth
As of 2023, maternity leave has been extended from 60 to 98 days, in line with International Labour Organizations standards. Employers cannot terminate a pregnant employee, except in very limited circumstances (e.g. misconduct, business closure)
Paternity Leave (New Benefit)
To support fathers in their caregiving role, the Act now provides 7 days of paid paternity leave for eligible male employees.
To qualify male employees must:
Conclusion
The Employment Act 1955, especially with the 2022 amendments, marks a significant step forward for Malaysian labour protection. The Act reflects Malaysia’s commitment to fair and progressive employment standards.
For employers, compliance is not only a legal obligation but also a mark of ethical business. For employees, being informed of your rights empowers you to seek redress, improve working conditions and ensure personal dignity at work. Together, understanding and applying these rights helps build a stronger, fairer workforce for Malaysia’s future.
