Hospitalization Leave Malaysia: Employer Responsibilities and Employee Rights

Hospitalization leave is a protected form of sick leave that ensures employees are paid while recovering from serious illness or injury. Employers play a key role in managing this process, from approving medical certificates to paying wages correctly. This guide explains what hospitalization leave is, how it works, and what employers need to do.

What Is Hospitalization Leave in Malaysia?

Hospitalization leave is a form of paid medical leave under the Employment Act 1955. It applies when an employee is certified by a doctor as needing hospital treatment, observation, or surgery.

Unlike ordinary sick leave, hospitalization leave is triggered by a hospital admission or when a doctor certifies that hospitalization is necessary. It ensures employees can focus on recovery without worrying about income, while employers remain compliant with the law.

How Many Paid Sick Days Are Employees Entitled To in Malaysia?

The Employment Act provides different sick leave entitlements based on length of service:

14 days if employed for less than 2 years.
18 days if employed 2 to 5 years.
22 days if employed for more than 5 years.

If hospitalization is required, the combined entitlement of sick leave + hospitalization leave is capped at 60 days per year.

Example: An employee who has already used 18 days of outpatient sick leave will have 42 days left for hospitalization leave, not 60 days separately.

What’s the Difference Between Sick Leave and Hospitalization Leave in Malaysia?

Sick leave is for regular outpatient treatment, rest, or minor illnesses certified by a doctor. However, hospitalization leave is granted when an employee is admitted to a hospital, requires observation, or undergoes treatment that justifies admission.

Both require a medical certificate from a registered medical practitioner.

Is A Medical Certificate Required?

Yes. Employees must present a valid medical certificate (MC) to qualify for paid sick leave or hospitalization leave. Employers are not obligated to approve leave without one.

When Can Employers Ask for Proof from A Registered Medical Practitioner?

Employers are entitled to request proof whenever sick leave or hospitalization leave is claimed. Under the law, MCs must come from:

A registered medical practitioner appointed by the employer (company panel), or
If unavailable, any registered medical practitioner or government medical officer.

Employees must also notify the employer within 48 hours of starting sick leave. Failure to do so may cause the absence to be treated as unpaid or unauthorised.

Can Hospitalization Leave Malaysia Be Carried Forward?

No. Sick leave and hospitalization leave entitlements cannot be carried forward to the next year. The balance resets annually.

Can An Employer Refuse Sick Leave or Hospitalization Leave?

Employers cannot refuse leave if:

The employee presents a proper MC or hospital admission document.
The employee is within the entitlement limit (max 60 days).

Employers may, however, investigate cases that look suspicious or involve invalid documents.

Is Hospitalization Leave Deducted from Annual Leave?

No. Sick leave and hospitalization leave are separate entitlements under the Act. Employers must not deduct these days from an employee’s annual leave entitlement.

What If Hospitalization Leave Is Misused?

If this happens, employers have the right to request additional proof or verification from the hospital and conduct an inquiry if there is evidence of abuse (e.g., false claims). If proven, employers can take disciplinary action if misuse is established.

What If the Employee Can No Longer Work Due to Illness?

If an employee’s medical condition prevents them from returning to work after exhausting their entitlements, employers may consider termination on medical grounds.

Best practice for employers:

Obtain an independent medical opinion before making decisions.
Explore alternatives like light duties or extended unpaid leave.
Keep records of all communication and steps taken.

Terminating solely because an employee used lawful hospitalization leave is risky and may lead to unfair dismissal claims.

Can Employers Terminate Employment For Someone on Long-Term Sick Leave?

Yes, but only in limited situations and after a fair process. Employers should:

Confirm through medical reports that the employee is permanently unfit for their role.
Provide reasonable accommodations where possible.
Use termination on medical grounds only as a last resort.

Tips for Supporting Employees on Sick Leave

Below are strategies employers in Malaysia can use when managing staff on hospitalization leave.

Create a Clear Sick Leave policy

Employees should never be confused about how to apply for hospitalization leave. So, employers need to outline sick leave application steps in the employee handbook. State what documents (e.g., medical certificates, hospital admission forms) are needed. Don’t forget to mention timelines for submission (e.g., employees must inform HR within 48 hours of admission).

Keep Accurate Leave Records

Employers must record all sick leave and hospitalization leave carefully, as the Employment Act 1955 sets a maximum entitlement of 60 days per year.

To help you record all types of leaves, use HR software or spreadsheets to track balances. Then, store medical certificates and supporting documents securely for audit purposes. Regularly update employees on how many days they have left.

Communicate with Empathy

A phone call or message from HR checking on the employee’s condition goes a long way.

Express concern for the employee’s recovery. Provide updates about workplace arrangements so they don’t feel left out. Reassure them that their job is safe while they are on approved medical leave. These actions can reduce employees' anxiety and show genuine care, which builds loyalty.

Plan for Temporary Work Arrangements

When an employee is on long hospitalization leave, workloads must still be managed to ensure business continuity without overburdening the rest of the team. Employers can reassign duties among team members. Otherwise, bring in temporary staff or contractors for critical roles. Cross-train employees so others can step in when needed.

Pay Salaries Promptly during Leave

The law requires employers to pay wages during approved sick leave or hospitalization leave. Ensure payroll reflects the correct number of paid days. More importantly, avoid salary delays, as this may cause financial stress for employees already dealing with illness.

Monitor for Possible Abuse Fairly

While most employees are genuine, employers should have a system for checking potential misuse.

Employers can verify suspicious medical certificates with the hospital. Investigate patterns such as repeated leave around weekends or public holidays. Handle the cases discreetly. Avoid public accusations and follow a proper inquiry process.

If abuse is proven, employers may take disciplinary action, but fairness is key.

Support Return-to-Work Transition

After hospitalization, employees may not immediately return to full strength. Offer light duties or flexible hours for the first week. You can also allow employees to use work-from-home arrangements if suitable. Encourage medical check-ups before resuming heavy workloads.

Review and Update Policies Regularly

Medical practices and regulations evolve. Regularly, revisit sick leave policies. It can be annually or twice a year. Ensure that the policies align with the Employment Act and any collective agreements.

Provide training for HR and line managers on handling medical leave cases properly.

Manage Sick Leave Easily

Handling sick leave can quickly become messy if records are incomplete or approvals are delayed. By establishing a straightforward system for recording, approving, and compensating hospitalization leave, businesses can prevent disputes and foster trust with their employees.

Recording & Approving Hospitalization Leave

Employers should set up an SOP for consistency:

Employee notifies manager/HR and submits an MC or hospital admission note.
HR verifies the document and checks the balance (max 60 days per year).
Manager approves and HR records the leave in a tracker.
Payroll is updated and HR confirms approval to the employee.

Tracking can be done using a simple template or HR software.

Payment Obligations During Hospitalization Leave

Hospitalization leave is paid leave under the Employment Act 1955. Pay employees at their ordinary rate of pay during approved hospitalization leave (within the entitlement limit).

Ensure that monthly-paid employees are not penalised with pay cuts when they are on approved hospitalization leave. For daily-rated employees, pay for the rostered workdays covered by approved hospitalization leave.

Always update payroll promptly so that employees receive their salaries on time, even when they are away from work.

Respect the cap: a maximum of 60 days per year, combining ordinary sick leave and hospitalization leave. Don’t deduct hospitalization leave from annual leave entitlements.

Documentation & Medical Certificates Required

To qualify for paid hospitalization leave, employees must provide valid documentation. Employers should require:

Medical Certificate (MC) issued by a registered medical practitioner or a government hospital.
Hospital admission or discharge note confirming inpatient treatment.
Extension MC if the hospital stay or recovery lasts longer than originally stated.
Authorisation letter and IC/passport if leave is applied on behalf of the employee (e.g., by HR for record-keeping).

Employers may verify certificates with the clinic or hospital if anything looks suspicious. All documents should be kept securely in employee files for reference and compliance.

How Hospitalization Leave Affects Businesses

When employees take hospitalization leave, it also affects the company’s operations. The challenge lies in balancing compassion with business continuity. Here are the main ways hospitalization leave can impact a business, and what employers can do about it.

Productivity and Workflow Disruptions

An extended absence often means tasks are left unfinished or projects slow down. This can be especially challenging for small teams where each role is critical. Employers may need to redistribute workloads, adjust project timelines, or hire temporary staff to cover essential duties.

Additional Costs for the Employer

Hospitalization leave is fully paid leave under the Employment Act 1955. Employers must continue to pay wages during this period, even while the employee is not working. On top of this, costs may increase if temporary staff or overtime is needed to keep operations running.

Strain on Other Employees

When one employee is away, colleagues often take on extra responsibilities. If not managed well, this can lead to burnout, reduced morale, or errors in work. Employers should recognise this and provide support, whether by rotating duties fairly, offering flexible arrangements, or hiring short-term replacements.

Risk of Non-Compliance

If employers fail to follow the law, such as refusing valid hospitalization leave, deducting it from annual leave, or not paying wages, they risk legal disputes and complaints to the labour authorities. Non-compliance may also harm the company’s reputation as an employer.

Planning for Continuity

Proactive employers prepare for these situations by:

Having cross-training programmes so staff can cover multiple roles.
Setting up clear SOPs for leave management.
Using HR software to track entitlements and ensure compliance.

FAQs

How many days of hospitalization leave are employees entitled to?

Up to 60 days per year, inclusive of ordinary sick leave.

Can employees combine normal sick leave with hospitalization leave?

Yes, but the total cannot exceed 60 days in a year.

What documents are needed to apply for hospitalization leave?

A valid medical certificate or hospital admission form from a registered medical practitioner.

Is hospitalization leave paid in Malaysia?

Yes. Employers must pay wages during approved hospitalization leave.

Does hospitalization leave apply for outpatient procedures?

If the doctor certifies that the employee needs hospitalization (e.g., for observation after surgery), it qualifies.

How should employers handle abuse of hospitalization leave?

Employers may request verification and conduct inquiries. Proven abuse may lead to disciplinary action.

Does hospitalization leave entitlement differ for foreign employees?

No. The Employment Act applies equally, unless the employment contract offers more favourable terms.

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