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Conditions of Employment

Conditions of Employment

Malaysia offers the investor a diligent, disciplined, educated and trainable labour force. Malaysian youths who enter the labour market would have undergone at least 11 years of school education i.e. up to secondary school level, and therefore easy to be trained in new skills. In addition, 27% of the labour force has tertiary education.

To cater for the manufacturing sector’s expanding demand for technically trained workers, the Malaysian government has taken measures to increase the number of engineers, technicians and other skilled personnel. Emphasis is given to Technical and Vocational Education and Training (TVET) with industries being given platforms to collaborate with TVET providers to ensure that the supply of graduates could meet industries requirements.

In addition, Malaysia enjoys a free and competitive labour market where employer-employee relationship is cordial and harmonious. The Government continuously review labour related legislation to meet labour market requirements. Upskilling and reskilling programmes are available to ensure stable employer-employee relations.

Labour costs in Malaysia are relatively low while productivity levels remain high in comparison with industrialised countries. Many programmes and facilitation are available for productivity improvements including productivity linked wage system, automation and skills training.

LABOUR COSTS

Salary and fringe benefits for employees vary according to industry, location and employment size. The common types of leave provided by companies include annual leave, public holiday, sick leave, hospitalization leave, maternity leave and compassionate leave. In some companies, additional benefits include provision of uniforms, transport, incentives payments, shift allowance and insurance coverage. Bonus payments are given by some companies based on the companies’ performance and individual performance.

FACILITIES FOR RECRUITMENT

Besides registered private employment agencies, employers and job seekers can register free thru JobsMalaysia Portal in order to seek for suitable candidates and available vacancies throughout the countries. There are about 90 JobsMalaysia Centre all over the country which operated at Urban Transformation Centre (UTC), Rural Transformation Centre (RTC) and Labour Offices. Employers and job seekers are also invited to join Jobs Carnival organized by JobsMalaysia.

LABOUR STANDARDS

The Department of Labour is responsible for the administration of labour laws in order to maintain industrial harmony. The labour laws stipulate the minimum requirements that must be followed by the employers to protect employees rights and benefit. Some flexibility in the operation of businesses is facilitated by application for exemption to the Director of Labour, Department of Labour.

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

Paid maternity leave60 days
Normal work hoursNot exceeding eight hours in one day or 48 hours in one week
Paid holidayAt least 11 gazetted public holidays ( inclusive of five compulsory public holidays; National Day, Birthday of the Yang di-Pertuan 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 service8 days
Two or more but less than five years of service12 days
Over five years of service16 days

*Minimum paid annual leave to be provided for employees

Paid sick leave per calendar year

Less than two years of service14 days
Two or more but less than five years of service18 days
Over five years of service22 days
Where hospitalisation is necessaryUp 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 daysOne-and-a-half times the hourly rate of pay
Rest daysTwo times the hourly rate of pay
Public holidaysThree 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 RM1100 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

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