Gig Workers Act 2025 Malaysia: What Employers Need to Know in 2026

Malaysia's gig economy has entered a new era with the implementation of the Gig Workers Act 2025 (Act 872).

Officially coming into force on 31 March 2026, the Act provides legal protection for more than 1.6 million gig workers across Malaysia while introducing new compliance requirements for platform providers and contracting entities.

For employers, HR teams, and businesses that engage gig workers, understanding the new rules is essential to avoid compliance risks and prepare for future regulatory changes.

In this guide, we'll explain what the Gig Workers Act 2025 is, who it applies to, employer responsibilities, worker rights, SOCSO contribution requirements, dispute resolution procedures, and what businesses should do next.

Gig Workers Act 2025 at a Glance

Key Information	Details
Act Name	Gig Workers Act 2025 (Act 872)
Effective Date	31 March 2026
Workers Covered	More than 1.6 million gig workers
SOCSO Contribution Rate	1.25%
Dispute Resolution Body	Gig Workers Tribunal
Advisory Body	Malaysian Gig Economy Council (MyGiG)

What Is the Gig Workers Act 2025 (Act 872)?

The Gig Workers Act 2025 (Act 872) is Malaysia's first dedicated legislation governing gig work arrangements.

The Act was introduced to:

Protect the rights of gig workers
Regulate service agreements
Define responsibilities of contracting entities
Improve social security protection
Strengthen occupational safety standards
Establish dispute resolution mechanisms
Create the Gig Workers Tribunal

Unlike traditional employees who are protected under the Employment Act 1955, gig workers now operate under their own dedicated legal framework.

This allows Malaysia to regulate the growing gig economy while maintaining flexibility for both workers and businesses.

Gig Workers vs Employees in Malaysia

Factor	Gig Worker	Employee
Governing Law	Gig Workers Act 2025 (Act 872)	Employment Act 1955
Working Arrangement	Service Agreement	Employment Contract
Flexibility	High	Employer-controlled
Working Hours	Usually flexible	Usually fixed
EPF Contributions	Not mandatory under Act 872	Mandatory
SOCSO Coverage	Self-Employment Social Security Scheme	Employer contributions required
Annual Leave	Not automatically provided	Statutory entitlement
Sick Leave	Not automatically provided	Statutory entitlement
Employment Status	Independent gig worker	Employee

While gig workers enjoy greater flexibility, employers should understand that the Gig Workers Act introduces specific protections and compliance obligations that did not previously exist.

Why Was the Gig Workers Act Introduced?

Malaysia's gig economy has expanded significantly over the past decade.

Millions of Malaysians now earn income through:

E-hailing services
Food delivery platforms
Courier services
Freelance marketplaces
Creative services
Care services
Media and content-related work

Before Act 872, there was no dedicated legislation specifically governing gig workers.

The new law addresses concerns relating to:

Income protection
Social security coverage
Unfair deactivation
Workplace safety
Dispute resolution
Transparency in platform operations

The goal is to create a more sustainable and secure gig economy while preserving flexibility for both workers and businesses.

Who Is Considered a Gig Worker?

Under the Act, a gig worker is a Malaysian citizen or permanent resident who:

Enters into a service agreement with a contracting entity
Performs services in exchange for earnings
Provides services through a platform provider or approved gig arrangement

Examples include:

Grab drivers
Food delivery riders
Parcel delivery workers
Freelance designers
Content creators
Care workers
Media professionals

Who Is Covered Under the Gig Workers Act?

Category	Coverage Status
E-hailing drivers (e.g. Grab)	Covered
Food delivery riders	Covered
Parcel and courier delivery workers	Covered
Freelance creatives	Covered
Media professionals	Covered
Care service providers	Covered
Traditional employees under the Employment Act 1955	Not Covered
Permanent employees	Not Covered

The Gig Workers Act creates a separate legal framework for gig workers. This means gig workers are not automatically classified as employees and are governed by different rights and obligations compared to traditional employment arrangements.

Who Is a Contracting Entity?

A contracting entity refers to:

An individual
A company
An organisation
A platform provider

That engages a gig worker under a service agreement in exchange for payment.

Businesses that hire gig workers directly or through digital platforms may fall within this definition.

What Is a Platform Provider?

A platform provider is a digital intermediary system that connects gig workers with customers or service users.

Examples include:

E-hailing platforms
Delivery applications
Freelance marketplaces
Service booking platforms

Platform providers are subject to additional obligations under the Act.

What Must Be Included in a Service Agreement?

One of the most important requirements under the Act is the use of a proper service agreement.

Every service agreement should clearly state:

Parties involved
Duration of the agreement
Services to be provided
Obligations of each party
Earnings and payment rates
Payment methods
Benefits (if applicable)
Tips and gratuities (if applicable)

Any contractual term that is less favourable than the minimum protections provided under the Act may be void and replaced by the statutory provisions.

What Rights Do Gig Workers Have?

The Act introduces several important rights for gig workers.

Right to Information

Workers must be informed about:

Services to be performed
Payment rates
Payment methods
Contract terms

before accepting work.

Right to Timely Payment

Workers must receive earnings within the agreed payment period.

Right to Be Consulted

Gig workers should be informed and consulted regarding significant changes to service agreements.

Freedom of Association

Gig workers have the right to:

Join gig worker associations
Participate in association activities
Establish their own associations

Protection Against Discrimination

Contracting entities cannot discriminate against workers regarding working conditions, assignment of tasks, or earnings.

Protection Against Unfair Termination

Workers should not have their service terminated without just cause or excuse.

New Rules on Platform Algorithms and Automated Decisions

Platform providers must inform workers about:

Automated monitoring systems
Automated evaluation systems
Automated decision-making processes

Workers must also have access to a human review process when automated systems affect their work opportunities or conditions.

This increases transparency in how platform algorithms operate.

Can Platform Providers Suspend or Deactivate Workers?

Yes, but strict rules now apply.

A platform provider may suspend or deactivate a worker if:

The action complies with the service agreement; or
Misconduct has occurred.

Workers must generally receive:

Notice of the issue
An opportunity to be heard
Written explanations of decisions

Compensation During Investigations

If a worker is suspended while an investigation is conducted and the platform later determines there are no valid grounds for deactivation, the worker may be entitled to receive 50% of their average daily earnings during the suspension period.

Gig Worker SOCSO Contributions Under the Gig Workers Act

The Gig Workers (Social Security) Regulations 2026 introduce mandatory social security contribution requirements.

Platform providers must:

Register gig workers under the Self-Employment Social Security Scheme
Submit worker information to PERKESO
Implement contribution deduction mechanisms
Facilitate contributions on behalf of workers

What Is the Contribution Rate?

The contribution rate is set at 1.25%.

Platform providers are responsible for implementing the deduction process according to PERKESO requirements.

Is the Platform Paying Additional Employer Contributions?

Currently, the Act requires platform providers to facilitate deductions and contributions on behalf of workers.

It does not impose traditional employer-style social security contribution obligations similar to those applicable to employees.

Need to estimate workforce costs? Use SOCSO Calculator to estimate contributions and better understand hiring-related expenses.

Occupational Safety and Health Responsibilities

The Act extends occupational safety responsibilities into the gig economy.

Contracting entities must:

Conduct risk assessments
Implement risk control measures
Provide safety-related guidance
Ensure safe working conditions
Establish emergency procedures
Report occupational accidents and diseases

How Are Disputes Resolved?

The Act introduces a structured dispute resolution process.

Step 1: Internal Grievance Process

Workers may submit a written complaint to the contracting entity.

The contracting entity is generally expected to resolve the dispute within 30 days.

Step 2: Conciliation

If the issue remains unresolved, the matter may proceed to conciliation through the Ministry of Human Resources.

Step 3: Gig Workers Tribunal

If conciliation fails, the dispute can be referred to the Gig Workers Tribunal.

The Tribunal may order:

Recovery of earnings
Compensation
Compliance with service agreements
Refunds
Restoration of platform access
Other appropriate remedies

Tribunal decisions are legally binding.

How Can Gig Workers File a Complaint?

Workers experiencing issues such as:

Unpaid earnings
Contract disputes
Unfair deactivation
Service agreement violations

can take the following steps:

Internal Complaint

Submit a written complaint through the contracting entity's grievance mechanism.

e-Aduan System

If the issue remains unresolved, workers can submit a complaint through the Ministry of Human Resources' e-Aduan System.

Visit a Labour Office

Workers may also file complaints directly with relevant agencies under the Ministry of Human Resources.

Tribunal Proceedings

Where necessary, disputes may proceed to the Gig Workers Tribunal.

What Is the Malaysian Gig Economy Council (MyGiG)?

The Act establishes the Malaysian Gig Economy Council (MyGiG), a consultative body comprising representatives from government agencies, contracting entities, and gig workers.

Its responsibilities include advising the government on:

Minimum earnings rates
Industry standards
Regional differences
Future gig economy policies

This allows regulations to evolve alongside Malaysia's growing gig economy.

Gig Workers Act Compliance Checklist for Employers

Businesses that engage gig workers should:

Review Service Agreements

Ensure agreements contain all mandatory information required under the Act.

Review Worker Management Processes

Update onboarding, payment, suspension, and grievance procedures.

Prepare for PERKESO Compliance

Confirm systems can support contribution deductions and reporting obligations.

Train HR and Operations Teams

Managers responsible for gig workers should understand the new requirements.

Monitor Future Developments

Additional guidance may be issued through PERKESO, KESUMA, and MyGiG recommendations.

FAQs

Has the Gig Workers Act 2025 come into force?

Yes. The Act officially came into force on 31 March 2026.

Does the Act apply to all businesses?

The Act applies to contracting entities and platform providers that engage gig workers through service agreements.

What is the SOCSO contribution rate for gig workers?

The Gig Workers (Social Security) Regulations 2026 set the contribution rate at 1.25%.

Can a platform deactivate a worker without explanation?

No. The Act requires procedural safeguards, including notice, an opportunity to be heard, and written explanations.

What is MyGiG?

MyGiG is the Malaysian Gig Economy Council established under the Act to advise the government on gig economy matters.

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