Malaysia
Capital: Kuala Lumpur
Currency: - MYR
Malaysia Labor Law and Employment Policy Overview
Employment Law Overview
- Key Legislations:
- Employment Act 1955
- Occupational Safety and Health Act 2000
- Social Security Act 2002
- Employment Insurance Act 2007
- Legal Characteristics:
- Aims to protect employees' rights and welfare
- Prescribes standards for minimum wage, working hours, leave, and severance pay
- Enforced by the Ministry of Human Resources
Employment Contract Requirements
- Contract Types:
- Fixed-term contracts
- Indefinite-term contracts
- Contractual Terms:
- Must include details of job scope, remuneration, working hours, leave, etc.
- Must be written in both English and Malay
- Language and Currency:
- Contracts must be in English and Malay
- Salary and benefits must be specified in Malaysian Ringgit (MYR)
Working Hours Regulations
- Standard Working Hours: 48 hours per week
- Rest Days and Breaks:
- At least one rest day per week
- Entitled to a 30-minute break after 6 hours of work per day
Leave Policy
- Annual Leave:
- Less than 2 years of service: 8 days
- 2 to 5 years of service: 12 days
- More than 5 years of service: 16 days
- Public Holidays: 11 days
- Special Leave:
- Sick Leave:
- Less than 2 years of service: 14 days per year
- 2 to 5 years of service: 18 days per year
- More than 5 years of service: 22 days per year
- Maternity Leave: 98 consecutive days
- Paternity Leave: 7 days
- Sick Leave:
Employee Severance and Termination
- Notice Period:
- Less than 2 years of service: 4 weeks
- 2 to 5 years of service: 6 weeks
- More than 5 years of service: 8 weeks
- Severance Pay:
- Less than 2 years of service: Nil
- 2 to 5 years of service: 15 days' wages for each year of service
- More than 5 years of service: 20 days' wages for each year of service
- Unfair Dismissal Protection:
- Employers cannot dismiss employees based on discrimination or retaliation
- Employees have the right to lodge a complaint for unfair dismissal
Taxation
- Personal Income Tax:
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Salary Range (MYR) Tax Rate 0 - 5,000 0% 5,000 – 20,0000 1% 20,000 – 35,000 3% 35,000 – 50,000 8% 50,000 – 70,000 11% 70,000 – 100,000 19% 100,000 – 250,000 24% 250,000 - 400,000 25% 400,000 – 600,000 25% 600,000 – 1,000,000 26% 1,000,000 – 2,000,000 28% Above 2,000,000 30%
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- Social Security Contributions:
- Employee: 1.75%
- Employer: 12%
Health Insurance
- Insurance Policy:
- Employees are required to participate in the health insurance scheme of the Social Security Organization of Malaysia (SOCSO)
- Insurance Coverage:
- Medical expenses
- Disability benefits
- Death benefits
Compensation and Benefits
- Minimum Wage: MYR 1,500/month
- Salary Structure:
- Basic salary
- Allowances
- Bonuses
Work Permits and Visas
- Permit Requirement:
- Foreign employees require a work permit
- Application Process:
- Employer applies to the Ministry of Human Resources
- Employee submits necessary documents, such as passport and resume
Confidentiality and Non-Compete Clauses
- Enforceability:
- Confidentiality and non-compete clauses are enforceable in Malaysia
- Common Provisions:
- Restrict employees from disclosing confidential information after leaving employment
- Restrict employees from working for competitors after leaving employment
Training and Development
- Legal Requirement:
- Employers must provide safety training to employees
- Government Support:
- Government provides funding and incentives to support employee training
Workplace Diversity and Inclusion
- Legal Requirement:
- Prohibits discrimination based on factors such as race, religion, or gender
- Enforcement Measures:
- Employers must establish policies and procedures to prevent discrimination
Remote Work Policy
- Legal Framework:
- No specific legal framework governing remote work
- Tax and Insurance Implications:
- Remote work may affect employees' tax and social security obligations
Authoritative Website Addresses
- Ministry of Human Resources Malaysia: https://www.mohr.gov.my/