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Malaysia – Employment Terms and Conditions

Working Hours in Malaysia

The standard working week in Malaysia is 48 hours, with a maximum of 8 hours per day. However, for certain industries and categories of employees, the maximum working hours per day may be increased to 9 hours. Employees are entitled to at least one rest day per week and a minimum of 11 consecutive hours of rest per day.

Employment Rights and Benefits in Malaysia

Paid Vacation and Sick Leave

Employees in Malaysia are entitled to a minimum of 10 days of paid annual leave after one year of continuous service. In addition, workers are entitled to a varying amount of sick leave depending on the duration of their employment. For example, employees are entitled to up to 14 days of paid sick leave per year after 2 years of service.

Social Security Benefits

All employees in Malaysia must contribute to the Employees Provident Fund (EPF), which is a retirement savings plan. Both employers and employees make contributions to the EPF, with the employee contribution rate at 11% of their salary. The EPF also provides benefits such as disability and death benefits, as well as housing and education withdrawals.

Maternity and Paternity Leave


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Expectant mothers in Malaysia are entitled to 14 weeks of maternity leave, with the first 8 weeks being paid at their full salary. Fathers are entitled to 3 days of paternity leave, which must be taken within 2 weeks of the birth of the child.

Severance Pay

If an employee is terminated without just cause, they are entitled to receive severance pay. The amount of severance pay depends on the length of service with the employer. For example, employees with less than 2 years of service are entitled to 10 days’ pay, while those with more than 10 years of service are entitled to 1 month’s pay.

Pensions

All employees in Malaysia must contribute to the Employees Provident Fund (EPF), which serves as a retirement savings plan. Upon retirement, employees may withdraw their EPF savings or choose to receive a monthly pension from the fund. The amount of pension received depends on the amount of savings accumulated during the employee’s working years.

Types of Pensions for Expats in Malaysia

Expats who are working in Malaysia may contribute to the Employees Provident Fund (EPF) if they have a valid work permit and are enrolled in the system. Upon retirement, expats may withdraw their EPF savings or choose to receive a monthly pension from the fund.

Retirement Age in Malaysia

The retirement age in Malaysia is currently 60 years old. However, the government is considering increasing the retirement age to 65 years old to address the aging workforce and labor shortages.

In conclusion, workers in Malaysia are entitled to a range of employment rights and benefits, including paid vacation and sick leave, social security benefits through the Employees Provident Fund (EPF), and severance pay. Expats may also contribute to the EPF and receive a pension upon retirement. The retirement age in Malaysia may be increased in the future to address labor shortages. It is important for both employers and employees to understand these employment terms and conditions to ensure that workers are being treated fairly and in accordance with the law.


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