Malaysia’s Basic Labour Law for Employers

Malaysia’s basic labour law for Employers:

1.Working hours permitted under Akta Kerja 1955:

a.A worker cannnot work for directly for 5 hours non stop without a minimum rest time for 30 minutes.

b. 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:

a. Employee’s contribution to Employees Provident Fund (EPF).

b. Emploee’s contribution to Social Security Organization (SOCSO).

c. Monthly Income Tax Deductions (PCB).

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

a. Annual Leaves

Length of service                                       A/L Entitlement

-less than 2 years                                                  8 days

-more than 2 but less than 5 years                  12 days

-5 years and above                                               16 days

b. Medical Certificates (MC)                  M/C Entitlement

-less than 2 years                                                  14 days

-more than 2 but less than 5 years                    18 days

-more than 5 years                                                22 days.

-hospitalization                                                     60 days per year inclusive of M/C leaves

4. The 5 confirmed observe public holidays and the company is authorised to choose the balance of  observed  6 days.

i.The birthday of DYMM YDP Agong;

ii.The birthday of State’s Sultan;

iii.Labour Day

iv. National Day

v. Malaysia Day

Overtime Rate according to Malaysian Employment Act 1955.

For staff members whose monthly salary is < or = to RM2,000/- 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:-

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i. Overtime on Normal Working Day

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

ii. Overtime on Off-Day

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

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

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

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

c. 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.

iii. Overtime on Rest Day

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

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

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

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

c. 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.

iii. Overtime on Public Holiday

a. Less than normal hours of work:-

  2.0  x ordinary rate of pay

b. 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.

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