Malaysia’s Employment Act – What Employers Need to Know

As of 1 January 2023, the amendments for Malaysia’s Employment Act 1955 (EA 1955) came into effect. We compile a summary of important updates for employers to take note of:

1. EA 1955 covers all employees, despite differences in wages

Amendments to the First Schedule of the Act mean that all employees are now covered, despite differences in earnings. Those earning more than RM4,000/month are exempted from certain provisions including:

• Section 60(3) – Overtime rates for employees working on rest days
• Section 60A(3) – Overtime rates outside working hours
• Section 60C(2A) – Allowance for shift-based work
• Section 60D(3) – Overtime on public holidays
• Section 60D(4) – Overtime for half working days on holidays
• Section 60J – Termination, lay-off, retirement benefits

2. Update in maximum number of working hours

Employees in Malaysia are now allowed to only have a maximum of 45 hours during the work week, not including lunch hours. Pre-amendment, Malaysians worked a maximum of 48 hours during the work week.

3. Increased days for Maternity Leave

Post-amendment, working mothers in Malaysia see an update from 60 to 98 days of paid maternity leave post-delivery.

4. Paid Paternity Leave

Pre-amendment, Malaysia saw no paternity leave entitlement. Now, working fathers are entitled to 7 consecutive days of paid paternity leave.

5. Flexible and remote working arrangements

In this post-pandemic world, the amended EA 1955 states that employees are now allowed to apply for flexible working arrangements in writing and employers must respond within 60 days. For any cases of the arrangements being rejected, employers are required to write the reasons in writing.

6. Restrictions on employment of women

Previously, female Malaysian employees were forbidden from working night-time roles and underground work. The following restrictions have been completely lifted.

7. Sick leave (where hospitalisation is required)

Previously, Malaysians who required to be on hospitalisation leave were allowed 60 days minus any sick leaves taken. Post-amendment, Malaysians are still allowed 60 days, however, it is irrespective of any sick leave that has been previously taken.

8. Hiring foreign employees

Post-amendment, employers are required to obtain approval from the Director General when hiring foreign employees in Malaysia. Employers must also notify the Director General within 30 days when foreign employees are being terminated.

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