Human Resource


1 Conditions of Employment
Minimum Conditions of Employment

The Employment Act, 1955 is the main legislation on labour matters in Malaysia.

Paid maternity leave : 60 days
Normal work hours : Not exceeding eight hours in one day or 48 hours in one week
Paid holiday :

At least 11 gazetted public holidays ( inclusive of five compulsory public holidays; National Day, Birthday of the Yang Dipertuan Agong, Birthday of Ruler/Federal Territory Day, Labour Day and Malaysia day) in one calendar year and on any day declared as a public holiday under section 8 of the Holiday Act 1951

Paid annual leave for employees:
Less than two years of service : 8 days
Two or more but less than five years of service : 12 days
Over five years of service : 16 days

*Minimum paid annual leave to be provided for employees

Paid sick leave per calendar year:
Less than two years of service : 14 days
Two or more but less than five years of service : 18 days
Over five years of service : 22 days
Where hospitalisation is necessary : Up to 60 days (inclusive of the paid sick leave entitlement stated above)

*Minimum paid sick leave to be provided for employees

Payment for overtime work:
Normal working days : One-and-a-half times the hourly rate of pay
Rest days : Two times the hourly rate of pay
Public holidays : Three times the hourly rate of pay

Minimum Wages Order 2012

Generally, wages in Malaysia are not regulated and it is dependent on the demand and supply of the market forces. The Minimum Wages Order 2012 had laid down the minimum wages to be paid for all employees who fall within the First Schedule of the Employment Act 1955. Minimum wages is defined as basic wages, excluding any allowances or other payments. The minimum wages of RM900 was set for Peninsular Malaysia and RM800 for Sabah, Sarawak and Labuan. No employer shall pay below the stipulated amount. All local and foreign employees shall be entitled to receive the minimum wages as per the Order.

Minimum Retirement Age Act 2012
The minimum retirement age of an employee shall be upon the employee attaining the age of sixty years. The Schedule in the Act exempts certain persons who will not be subject to the Minimum Retirement Age Act 2012.

Source: Ministry of Human Resources - www.mohr.gov.my

2 Statutory Contributions
Employees Provident Fund

The compulsory contributions under the Employees Provident Fund (EPF) Act 1991:

Age Group 60 years and below
Employers a)  Monthly wages RM5,000 (US$1,563) and below Minimum of 13% of the employees' monthly wages
b) Monthly wages exceed RM 5,000 (US$1,563) - Minimum 12% of the employees' monthly wages
Employees Minimum of 11% of the employees' monthly wages
[Third Schedule (Part A) of the EPF Act 1991]

Age Group 60 - 75 years and below
Employers a) Monthly wages RM 5,000 (US$1,563) and below - Minimum of 6.5% of the employees' monthly wages
b) Monthly wages exceed RM 5,000 (US$1,563) - Minimum of 6% of the employees' monthly wages
Employees Minimum of 5.5% of the employees' monthly wages
[Third Schedule (Part C) of the EPF Act 1991]

All foreign workers and expatriates and their employers are exempted from compulsory contributions. They can, however, choose to contribute and the applicable rates are as follows:

Age Group 60 years and below
Employers RM5.00 (US$1.56) per employee per month
Employees 11% of the employees' monthly wages
[Third Schedule (Part B) of the EPF Act 1991]

Age Group 60-75 years and below
Employers RM5.00 (US$1.56) per employee per month
Employees 5.5% of the employees' monthly wages
[Third Schedule (Part D) of the EPF Act 1991]

Source: Employees Provident Fund - www.kwsp.gov.my

Social Security Organisation (SOCSO)

Social Security Organisation (SOCSO) was established in 1971 under the Ministry of Human Resources to implement and administer the social security schemes under the Employees' Social Security Act 1969, namely Employment Injury Scheme and Invalidity Scheme. 

All eligible Malaysian citizens and permanent residents employees are compulsory to register.
Employee's Eligibility:


i. Monthly wages of RM3,000 (US$937.50) or less

Employee who receives a monthly wages of RM3,000 (US$937.50)  or less is required to register and contribute.


ii. 'Once- In-Always-In' Principle

Employees who have already contributed and whose monthly wages exceed RM3,000 (US$937.50) are required to continue contributing.


iii. Monthly wages exceeding RM 3,000 (US$937.50)

New employee with monthly wages of more than RM 3,000 (US$937.50) can be covered upon mutual agreement between employer and employee.

Person exempted from Employee's Social Security Act 1969 coverage are as follow:
•     Federal and State Government employees except who are employed under temporary or contact basis
•     Domestic servants
•     Self-employed
•     Spouse/s of a sole proprietor or partners
•     Foreign workers (covered under Workmen's Compensation Act 1952)

Employment Injury Scheme which provides protection to an employee against accident or an occupational disease arising out of or in the course of his employment. The protection under this scheme covers for industrial accident, commuting accident and occupational disease. The benefits under this scheme are:

  • Medical benefit, temporary disablement benefit, permanent disablement benefit, constant-attendance allowance, facilities for physical/vocational rehabilitation, dependants' benefit, funeral benefit and education benefit.

Invalidity Scheme provides 24 hours coverage to an employee who suffers from invalidity or death due to any causes which are not related to his employment. The benefits under this scheme are:

  • Invalidity pension, invalidity grant, constant-attendance allowance, facilities for physical/vocational rehabilitation & dialysis, survivor's pension, funeral benefit and education benefit.

Source: Social Security Organisation (SOCSO) - www.perkeso.gov.my

Human Resources Development Fund (HRDF)

The Human Resources Development Fund (HRDF) is a dynamic organisation under the Human Resources Ministry that was established in 1993.

Governed by the Pembangunan Sumber Manusia Bhd Act 2001 (PSMB Act 2001), HRDF was given a mandate by the Malaysian Government to catalyse the development of competent local workforce that will contribute to Malaysia’s vision of becoming a high-income economy.

Since its inception, HRDF has evolved in its role from managing a sizeable fund to becoming a one-stop-centre for providing novel HRD solutions to the critical mass of Malaysian small medium enterprises.

The custodian and authoritative institution is well positioned to offer robust and prudent solutions that will help Malaysia move up in rank on the Global Competitiveness Index by enhancing regional and global competitiveness and create an effective and efficient Malaysian labour market that will help propel the country towards a high income nation by Year 2020.

In line with the 11th Malaysia Plan (11MP), the Malaysian Government has initiated several programmes that focus on accelerating human capital development through four major areas which are:

  • Improving the efficiency of labour market to accelerate economic growth;
  • Transforming  technical and vocational education to meet industry demand;
  • Strengthening lifelong learning for skills enhancement; and
  • Improving the quality of education system for better student outcomes and institutional excellence.

For the “Strengthening of Lifelong Learning for Skills Enhancement” programme, HRDF's dynamic new mandate is to ensure the creation and growth of quality local human capital through efficient high-skilled training certification programmes and initiatives that would contribute to a 35 per cent skilled Malaysian workforce and the creation of 1.5 million jobs by Year 2020.

Additionally, HRDF continues to be steadfast in its effort towards encouraging employers covered under the PSMB Act 2001 to retrain and upgrade the skills of
local employees, apprentices and trainees in keeping up with the fast evolving global business landscape while meeting their individual company’s aspirations.

Most recently, with 19 new sub-sectors that have been added to the PSMB Act (in addition to the 44 sub-sectors), HRDF has assumed a greater responsibility to reach out to the corporates; educating and motivating them to seek the benefits and value of HRDF programmes and initiatives.

 PSMB Act 2001

An Act that mandates the imposition and collection of a Human Resources Development (“HRD”) levy by PSMB to its registered employers to promote up-skilling, reskilling and development activities to their employees, apprentices and trainees.

Sectors covered under PSMB Act 2001:

  • Manufacturing
  • Services
  • Mining and Quarrying


The Act is eligible to Malaysian employers within the 63 sub-sectors under Manufacturing, Services and Mining and Quarrying sectors that employ a minimum of 10 Malaysian employees. [Full list of the 63 sub-sectors can be downloaded from the HRDF portal; www.hrdf.com.my.]

Sub-sectors with five to nine Malaysian employees may voluntarily register with HRDF regardless of their company’s paid-up capital.

  • MANDATORY (1% Levy)
    Malaysian employers with 10 Malaysian Employees and above
  • VOLUNTARY (0.5% Levy)
    Malaysian employers with 5 to 9 Malaysian Employees

Source: Pembangunan Sumber Manusia Berhad (PSMB) - www.hrdf.com.my

3 Employment of Expatriate

An employment pass is issued to expatriate to enable him to stay and work legally in the country. There are two types of passes issued by the Immigration Department subject to the period of employment's contract and the monthly salary received by the expatriates.

Employment Pass

This pass is issued for key-post and term-post position subject to the following conditions:

Type of Passes Payments of Fees
A. Employment Pass (PG)
This pass is issued for key-post and term-post position subject to the following conditions:
* minimum period of employment's contract is (2) years and stamping; and
* salary not less than RM5,000 (US$1,171)
i. Employment Pass:
* Key Post: RM300 (USD70)
* Term Post: RM200 (USD47)
ii. Processing fees – RM125.00 (US$29).
iii. Journey Perform Visa: RM500 (USD117)
per post/application (subject to visa entry requirement according to each country of origin)
iv. No levy
B. Visit Pass [VP(TE)] - PLKS
Visit Pass (Temporary Employment) is issued only for temporary domestic helper (maid)
i. Levy: RM410 (US$96).
ii. Processing Fees : RM125.00 (US$29).
iii. Journey perform visa (if applicable): RM500 (US$117). (include Visa based on the country of origin) - (if applicable)

Source: Immigration Department - www.imi.gov.my

4 Wage Rates
Salaries of Executives in the Manufacturing Sector

In manufacturing sector, the average basic monthly salary of the executives ranges from RM3,771(US$1,178) (Executives) to RM14,659 (US$4,581) (Senior Managers) to RM28,496(US$7,655) (Top Executives). The following table shows the average minimum and maximum monthly salaries of selected executive position

Executive Position RM USD
Min Max Min Max
General Manager 15,191 24,502 4,747 7,657
General Manager – Sales & Marketing/ Business Development 13,561 21,959 4,238 6,862
SeniorProduction/Manufacturing Manager 11,009 20,197 3,440 6,312
Financial Controller / Director 16,295 29,499 5,092 9,218
Finance / Accounts Manager 6,568 12,234 2,053 3,823
Finance / Accounts Executive 2,594 5,055 810 1,580
Company Secretary 5,711 10,175 1,784 3,180
Admin/HR/Finance Manager 6,881 12,608 2,150 3,940
Human Resource Manager 6,581 13,165 2,057 4,114
Training Manager 5,430 11,731 1,697 3,666
Quality Assurance Manager 6,294 12,473 1,967 3,898
Business Development Manager 7,541 14,394 2,357 4,498
Logistics Manager 6,230 11,133 1,947 3,480
Technical Manager 6,111 12,963 1,910 4,051
Marketing Manager 6,051 13,964 1,891 4,364
Operations Manager 6,617 13,008 2,068 4,065
Mechanical Engineer 3,266 6,660 1,021 2,081
Electrical/Electronics Engineer 3,231 6,640 1,009 2,075
IT/System Support Executive/Engineer 2,450 5,578 765 1,743
IT Executive 2,728 5,022 853 1,569
Marketing Executive 2,689 5,480 840 1,713
Quality Assurance Executive 2,757 4,879 862 1,525
Executive Secretary /Personal Assistant 3,257 6,390 1,018 1,997

Source: MEF Salary Survey for Executives 2015 - www.mef.org.my

Salaries of Non-Executives in the Manufacturing Sector

An analysis of the salaries of Non Executives in the manufacturing sector shows at the average monthly basic monthly salary ranged from RM1,216 (US$352) (unskilled employees) to RM1,717 (US$563) (semi-skilled employees) to RM2,352 (US$735) (skilled employees/craftsmen). The following table shows the average minimum and maximum monthly salaries of selected Non Executive position.

Non-Executive Position RM USD
Min Max Min Max
Secretary 1,644 4,242 514 1,326
Account Clerk 1,331 2,633 416 823
General Clerk 1,109 2,746 347 858
Receptionist/Telephone Operator 1,152 2,324 360 726
IT Supervisor 2,119 4,078 662 1,274
IT Assistant 2,123 4,222 663 1,319
Chargeman (Medium Pressure) 2,182 3,487 682 1,090
Production Supervisor 2,119 3,865 662 1,208
Machinist 1,228 2,711 384 847
Line Leader 1,273 2,554 398 798
Services Technician 1,255 3,000 392 938
Technician (General) 1,377 3,041 430 950
Electrician 1,464 2,728 458 853
Wireman/ Welder 1,557 2,928 487 915
Operator (Semi Skilled) 976 2,192 305 685
Operator (Unskilled) 918 1,679 287 525
Storekeeper/Warehousemen 1,415 2,745 442 858
Quality Control/Assurance Supervisor 2,355 4,048 736 1,265
Lorry/Truck/Van Driver 1,336 2,608 418 815
Security Guard 975 2,025 305 633

Source : MEF Salary Survey for Non Executives 2015 - www.mef.org.my



Starting a Business



Transportation Costs

Last Updated : Friday 22nd June 2018