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 2016

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 RM1000 was set for Peninsular Malaysia and RM920 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 6% 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)

Return to Work Programme

The Return to Work Programme was introduced in the year 2007. This rehabilitation programme uses a systematic case management methodology in assisting insured persons who suffer from disablement or invalidity to return to work.

Tun Razak Rehabilitation Centre

The centre supports the Return to Work Programme by providing comprehensive facilities to referred participants until the Insured Person is able to get back actively into the working world, contributing to the socio-economic development of families, communities and country.

Health Screening Programme

The Health Screening Programme (HSP) is a free health screening offered to all insured persons who are 40 years of age and above and actively contributing.

The objectives of this programme are:

  • •identify high risk groups of employees with Non-Communicable Diseases and to cultivate a healthy lifestyle
  • •detect Non-Communicable Diseases in the early stage
  • •to prevent the reduction or loss of income due to Non-Communicable Diseases

Self-Employment Social Security Act 2017 (Act 789)

The Self-Employed Employment Injury Scheme for self-employed taxi drivers or individuals carrying out similar services provides protection scheme for self-employed taxi drivers or individuals carrying out similar services under the Self Employment Social Security Scheme and took effect on 1 June 2017. This social protection was accorded under the provisions of the Self Employment Social Security Act 2017.

The duration of protection is 12 months from the date and time the contribution is paid and validated by the payment receipt.

This Scheme provides protection to self-employed insured persons from employment injuries including occupational diseases and accidents during work-related activities.
It also provides cash benefits to taxi drivers and their dependents besides providing medical care, physical rehabilitation and vocational training.

Employment Insurance System 2017 (Act 800)

The Employment Insurance System, (EIS) implemented in January 2018 as a social security network aimed at helping workers who lost their jobs and need financial assistance and seeking new jobs.

Objective of Employment Insurance System

  • Provide immediate financial assistance (7 days after job loss confirmation)
  • Assisting contributors who lost their jobs to get new jobs through a job relocation program including mobility assistance
  • Increase employability of contributors who lost their jobs through the training and vocational programme.


  • All employers who have one or more employees
  • All private sector workers regardless of the wage limits - subject to insured pay ceiling of RM 4,000

Qualifying Condition

  • Loss of employment (EXCEPT voluntarily resigning, employment contract period has expired on the terms as prescribed contract, termination for misconduct and retirement)
  • Claims – needs minimum 12 months contribution within 24 months prior loss of employment month

Contribution Rate

Employers: 0.2%, Employees: 0.2%

Benefit of Employment Insurance System

  • Job Placement and Counselling
  • Job Search Allowance
  • Early Re-employment Allowance
  • Training Allowance
  • Training Fee
  • Reduced Income Allowance

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.

 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 PSMB Act 2001 is applicable to employers within the 63 sub-sectors (specified in First Schedule) 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.]

The 63 Sub-sectors with five to nine Malaysian employees may voluntarily register with HRDF regardless of their company's paid-up capital.

  • MANDATORY (1% Levy)
    employers with 10 Malaysian Employees and above
  • VOLUNTARY (0.5% Levy)
    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 RM3,802(US$972) (Executives) to RM15,625 (US$3,996) (Senior Managers) to RM32,364(US$8,277) (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 15,242 24,111 3,898 6,166
Financial Controller/Director 15,582 27,099 3,985 6,931
Finance / Accounts Manager 6,482 10,990 1,658 2,811
Finance / Accounts Executive 2,635 5,015 674 1,283
General Manager - Sales & Marketing/ Business Development 13,162 23,207 3,366 5,935
Business Development Manager 7,396 12,673 1,892 3,241
Marketing Manager 8,254 13,285 2,111 3,398
Marketing Executive 2,444 4,459 625 1,140
Administration Manager 6,631 11,250 1,696 2,877
Executive Secretary/Personal Assistant 3,677 7,081 940 1,811
Human Resource Manager 7,347 12,705 1,879 3,249
Senior Production/ Manufacturing Manager 12,175 23,176 3,114 5,927
Technical Manager 6,498 13,870 1,662 3,547
Quality Assurance Manager 6,702 12,619 1,714 3,227
Quality Assurance Executive 2,739 5,090 701 1,302
Purchasing Manager 6,155 11,444 1,574 2,927
Warehouse Manager 5,807 10,057 1,485 2,572
Operations Engineer 7,923 13,488 2,026 3,450
Mechanical Engineer 3,897 7,093 997 1,814
Electrical/Electronis Engineer 3,422 6,737 875 1,723
System Support Executive/ Engineer 2,888 4,863 739 1,244
IT Manager 6,765 13,394 1,730 3,426
IT Executive 2,767 5,393 708 1,379

Source: MEF Salary Survey for Executives 2017 - 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 RM1,364 (US$349) (unskilled employees) to RM3,772 (US$964) (supervisor). 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 2,651 4,672 678 1,195
Administration Assistant 1,652 3,172 423 811
General Clerk 1,087 2,615 278 669
Receptionist/Telephone Operator 1,379 2,803 353 717
Accounts Supervisor 2,462 4,410 630 1,128
Account Clerk 1,265 2,899 324 741
Human Resourcess Clerk 1,389 2,631 355 673
IT Supervisor 2,750 4,167 703 1,066
IT Assistant 1,932 3,429 494 877
Chargeman (Medium Pressure) 2,348 4,188 601 1,071
Production Supervisor 2,334 4,341 597 1,110
Line Leader 1,306 2,745 334 702
Services Technician 1,806 3,395 462 868
Technician (General) 1,521 3,058 389 782
Boilerman 2,125 3,512 543 898
Production Clerk 1,361 2,645 348 676
Machinist 1,382 2,869 353 734
Operator (Semi Skilled) 1,120 2,324 286 594
Operator (Unskilled) 1,015 2,030 260 519
Storekeeper/Warehousemen 1,690 3,376 432 863
Quality Assurance/ Control Supervisor 2,383 4,221 609 1,080
Lorry/Truck Driver 1,285 2,603 329 666
Security Guard 1,160 2,405 297 615

Source : MEF Salary Survey for Non Executives 2017 - www.mef.org.my



Starting a Business



Transportation Costs

Last Updated : Friday 18th January 2019