Malaysia’s basic labour law for Employers:

1. Working hours permitted under Akta Kerja 1955:
   
   
   1. a. A worker cannnot work for directly for 5 hours non stop without a minimum rest time for 30 minutes.
   2. A worker cannot work more than 8 hours per day and more than 48 hours per week.

       

2. What are the statutory deductions from an employee’s salary:
   
   1. Employee’s contribution to Employees Provident Fund (EPF).
   2. Employee’s contribution to Social Security Organization (SOCSO).
   3. Monthly Income Tax Deductions (PCB).
   4. Employment Insurance Scheme (EIS).

       

3. Types of Permitted Leaves: Annual Leaves (AL), Medical Certificate (MC) & Maternity Leaves:
   
   
   1. Annual Leaves
      

      Length of service	A/L Entitlement
      – less than 2 years	8 days
      – more than 2 years	12 days
      – 5 years and above	16 days

   2. Medical Certificates (MC)                  
      

      Length of service	M/C Entitlement
      – less than 2 years	14 days
      – more than 2 years	18 days
      – 5 years and above	22 days
      – hospitalization	60 days per year inclusive of M/C leaves

4. The 5 confirmed observe public holidays and the company is authorized to choose the balance of  observed  6 days.
   
   1. The birthday of DYMM YDP Agong;
   2. The birthday of State’s Sultan;
   3. Labour Day;
   4. National Day;
   5. Malaysia Day

5. Overtime Rate according to Malaysian Employment Act 1955:

For staff members whose monthly salary is < or = to RM 2,000.00 and any increase of salary where the OT is capped at RM 2,000.00, the Company pays the following overtime rate which is in accordance to the rate provided by the Malaysian Employment Act 1955 as follows:-

a. Overtime on Normal Working Day:

i. The overtime rate shall be 1.5 x Hourly Rate x Number of Hours Worked

b. Overtime on Off-Day:

i. Not exceeding half his normal hours of work:-

0.5 x ordinary rate of pay (half-day’s pay)

ii. More than half but up to eight (8) hours of work:-

1.0  x ordinary rate of pay (one day’s pay)

iii. In excess of eight (8) hours:-

1.5 x hourly rate x number of hours in excess of 8 hours

Remarks: It is applicable to Saturday & Sunday as off-day.

c. Overtime on Rest Day:

i. Not exceeding half his normal hours of work:-

 0.5 x ordinary rate of pay (half-day’s pay)

ii. More than half but up to eight (8) hours of work:-

1.0  x ordinary rate of pay (one day’s pay)

iii. In excess of eight (8) hours:-

2.0 x hourly rate x number of hours in excess of 8 hours

Remarks: It is applicable to shift employees where they work for a specific period of time.

d. Overtime on Public Holiday:

i. Less than normal hours of work:-

  2.0  x ordinary rate of pay

ii. In excess of normal hours of work:-

3.0  x hourly rate x number of hours in excess of 8 hours

Remarks: Do determine your company’s observed public holidays.

6. Benefits of Penamatan Kerja (retirement):

The employees are entitle to the benefits:

a. Working period of 1- 2 years @ 10 days salary per year.

b. Working period of 2- 5 years @ 15 days salary per year.

c. Working period of more than 5 years @ 20 days of salary per year.

Formula:

Salary with fixed allowances X 12 months X years of services divided by 365 days.

7. Payment for termination notice:

Unless with both’s agreement of termination notice and if not, the payment terms will be as written:

a. Less than 2 years @ 4 weeks of salary.

b. At year 2 and less than 5 years @ 8 weeks of salary.

c. More than 5 years @ 12 weeks of salary.