Hak Pekerja (Employee Rights) in Malaysia Explained for Employers

Every employee in Malaysia, whether permanent, contract, part-time, or probationary, is entitled to certain legal rights. These include fair wages, safe working conditions, annual leave, and protection against unfair dismissal. Keeping track of these obligations can feel overwhelming, but getting them right prevents costly disputes and helps retain motivated staff.

What Does “Hak Pekerja” Mean in Malaysia?

Hak pekerja refers to the legal entitlements granted to employees under labour laws. These rights ensure that workers are treated fairly, protected from exploitation, and supported with proper benefits.

The Employment Act 1955 is the main reference for employee rights, especially for those earning up to RM4,000 per month and for all manual workers regardless of wage. However, rights are also reinforced by other laws:

SOCSO (Social Security Organisation): Protection against workplace accidents, disability, and dependents’ benefits.
EPF (Employees Provident Fund): Retirement savings through employer and employee contributions.
EIS (Employment Insurance System): Financial support for employees who lose their jobs.
OSHA (Occupational Safety and Health Act 1994): Employers provide a safe and healthy workplace.

These protections apply to all types of employees, including permanent, probationary, contract, and part-time workers.

Key Employee Rights Employers Must Know

Employee rights (hak pekerja) are the foundation of fair employment practices in Malaysia. Understanding these rights is critical not only to comply with the law but also to foster a positive and productive workplace. Below are the key rights that every employer must respect and uphold:

Right to a Written Contract

Every employee must have a clear employment contract. The contract should state the job role, working hours, wages, leave entitlements, termination terms, and other conditions. Written contracts reduce disputes and ensure both parties understand their obligations.

Right to Fair Wages

Employees are entitled to wages not less than the government-set minimum wage (currently RM1,500 under the Minimum Wage Order 2022). Wages must be paid no later than the 7th day after the end of each wage period. Delayed or unfair wage practices can be considered a breach of the Employment Act.

Working Hours & Overtime Pay

The Employment Act sets clear limits on working hours:

Maximum of 8 hours per day or 45 hours per week.
Overtime work must be paid according to statutory rates:
- 1.5 times hourly rate for extra hours on normal working days.
- 2 times hourly rate for work on rest days.
- 3 times hourly rate for work on public holidays.

Employers must track working hours properly and pay employees fairly for overtime.

Rest Days & Public Holidays

Employees are entitled to:

At least one rest day per week.
A minimum of 11 gazetted public holidays each year (with 5 compulsory, such as Merdeka Day, Labour Day, and the King’s Birthday).

If employees are required to work on these days, they must receive holiday pay rates as stipulated by the Act.

Annual Leave, Sick Leave & Maternity/Paternity Leave

Employees have statutory leave entitlements based on years of service:

Annual Leave: 8 days (1–2 years service), 12 days (2–5 years), 16 days (over 5 years).
Sick Leave: 14 to 22 days per year, depending on years of service, with up to 60 days of hospitalisation leave.
Maternity Leave: 98 days, with protection from dismissal during the period.
Paternity Leave: 7 consecutive days for married male employees (introduced under the 2022 amendments).

Safe & Healthy Workplace

Under OSHA 1994, employers must provide a workplace that is safe and without health risks. This includes maintaining safe equipment, providing protective gear, and conducting safety training. Neglecting workplace safety can result in penalties and liability for accidents.

Protection from Unfair Dismissal

Employees cannot be terminated without just cause or excuse. Employers must follow due process, such as issuing warnings, conducting a domestic inquiry, and documenting reasons for dismissal. Wrongful or unfair dismissal can lead to Industrial Court orders for reinstatement or compensation of up to 24 months’ back wages.

Statutory Contributions & Benefits

Employers are legally required to contribute to:

EPF: Retirement savings contributions.
SOCSO: Protection against workplace accidents, injuries, and invalidity.
EIS: Insurance coverage for employees retrenched or losing jobs involuntarily.

These contributions must be deducted and remitted monthly to the respective statutory bodies.

Employer Responsibilities in Protecting Hak Pekerja

To stay compliant, employers should:

Draft proper written contracts and issue payslips to all employees.
Keep accurate HR and payroll records for at least 6 years.
Ensure payroll systems are updated with the latest wage, overtime, and leave regulations.
Train HR and line managers on labour laws and disciplinary procedures.
Stay updated with amendments to the Employment Act and related laws.

Risks of Ignoring Employee Rights

Employers who neglect hak pekerja face significant consequences:

Legal fines and penalties for breaching labour laws.
Industrial Court cases that may result in reinstatement orders or compensation awards.
Back wages of up to 24 months if wrongful dismissal is proven.
Reputational harm, which can affect recruitment and employee retention.

FAQs

1. What rights do employees have under the Employment Act 1955?

Employees are entitled to written contracts, fair wages, rest days, annual leave, sick leave, maternity/paternity leave, overtime pay, and protection from unfair dismissal.

2. Do foreign workers in Malaysia have the same rights as local workers?

Yes. Foreign workers are covered by the Employment Act and are entitled to wages, rest days, leave, and statutory contributions, just like local employees.

3. Can employers terminate employees without notice?

Only in cases of proven gross misconduct. Otherwise, employers must provide notice or payment in lieu of notice, as outlined in the contract or the Act.

4. What are the penalties for violating employee rights in Malaysia?

Employers may face fines, legal action in the Industrial Court, and orders for back wages or reinstatement.

5. Is overtime mandatory for employers to pay?

Yes. For employees covered by the Employment Act (generally those earning RM4,000 or below, and all manual workers), overtime pay is mandatory. For higher earners, terms must be agreed upon in the contract.

6. Do all employees qualify for maternity and paternity leave?

Yes, provided they meet the eligibility requirements under the Employment Act amendments. Employers must not dismiss employees due to pregnancy or paternity leave.

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