Easy Overtime Calculation for Shift Workers Under Malaysia's Employment Act 1955

Managing overtime for shift workers can be complex, but understanding Malaysia’s Employment Act 1955 ensures compliance and fair compensation.

This guide simplifies overtime calculation for shift workers.

Are Shift Workers Entitled to Overtime Pay?

Yes. Under Section 60A(3)(a) of the Employment Act 1955, shift workers must be paid for overtime when they work extra hours beyond their regular shift.

Employers must pay them according to the law for extra work on:

Regular workdays
Rest days (weekends)
Public holidays

If a shift worker completes their scheduled hours and works extra, those extra hours must be paid as overtime.

Work on public holidays must be paid triple the normal wage (Section 60D(3)).

What Happens if Employers Don’t Pay Overtime?

Not paying overtime is illegal in Malaysia. Employees can report their employer to the Department of Labour Malaysia. Under Section 100A of the Employment Act 1955:

Employers can be fined up to RM50,000.
Repeat violations can lead to higher fines and legal action.

Workers should keep track of their working hours and report any unpaid overtime.

Does a Shift Worker’s Salary Include Overtime?

No. A shift worker’s salary usually covers only regular working hours. Overtime pay is separate and depends on the extra hours worked.

However, if a contract says the salary includes overtime, workers should review the agreement to ensure it follows labor laws.

What is Considered Overtime?

According to Section 60A(1) of the Employment Act 1955, overtime includes work done beyond:

8 hours per day
48 hours per week
5 consecutive hours without a break

Any work beyond these limits is overtime and must be paid accordingly.

Overtime Calculation for Shift Workers

Shift workers work on different schedules, including nights, weekends, and public holidays. Overtime pay rates depend on when the extra hours are worked.

Here are the formulas based on the Employment Act 1995 for each overtime scenario:

Overtime on Normal Working Days

Rate: 1.5x hourly wage (Section 60A(3)(a))
Formula: Overtime Pay = (Hourly Wage × 1.5) × Overtime Hours

Example:

Ali earns a monthly salary of RM2,600 and works 26 days a month, with 8 hours per day.

His hourly wage is calculated as RM2,600 ÷ (26 × 8) = RM12.50.

If Ali works 3 extra hours, his overtime pay is (RM12.50 × 1.5) × 3 = RM56.25.

Overtime on Rest Days (Weekends)

Rate: 2x hourly wage (Section 60A(3)(b))
Formula: Overtime Pay = (Hourly Wage × 2) × Overtime Hours

Example:

Siti has a monthly salary of RM3,000 and works 24 days per month, 8 hours daily.

Her hourly wage is RM3,000 ÷ (24 × 8) = RM15.63.

If she works 4 extra hours on a rest day, her overtime pay is (RM15.63 × 2) × 4 = RM125.00.

Overtime on Public Holidays

Rate: 3x hourly wage (Section 60D(3)(a))
Formula: Overtime Pay = (Hourly Wage × 3) × Overtime Hours

Example:

Raj’s monthly salary is RM2,800, and he works 25 days per month with 8-hour shifts.

His hourly wage is RM2,800 ÷ (25 × 8) = RM14.00.

If he works 5 extra hours on a public holiday, his overtime pay is (RM14.00 × 3) × 5 = RM210.00.

Overtime for Night Shift Workers

Shift workers who work at night may also receive a night shift allowance.
Some employers pay an extra percentage (e.g., 10%) for night shifts.
This is added to the overtime pay for night work.

Example:

Mei Ling earns RM2,500 per month, working 26 days with 8-hour shifts.

Her hourly wage is RM2,500 ÷ (26 × 8) = RM12.02.

Since she works at night, she gets a 10% night shift allowance.

Her overtime rate is RM12.02 × 1.5 = RM18.03, and the night shift allowance adds RM18.03 × 10% = RM1.80.

Her total hourly overtime pay is RM18.03 + RM1.80 = RM19.83.

If she works 3 extra hours at night, her total overtime pay is RM59.49.

Overtime for Non-Shift Workers

Non-shift workers with fixed hours are also entitled to overtime if they exceed their standard hours. Their overtime pay follows the same rules (1.5x, 2x, 3x) depending on the day.

Difference Between Shift and Non-Shift Workers

Shift Workers: Work on rotating schedules, including night shifts, weekends, and public holidays.
Non-Shift Workers: Work fixed hours (e.g., 9 AM - 5 PM, Monday to Friday) with regular rest days.
Shift workers often receive allowances for irregular hours, while non-shift workers have predictable work schedules.

FAQs on Overtime Calculation for Shift Workers

How is overtime calculated?

1.5x pay for overtime on normal workdays.
2x pay for overtime on rest days.
3x pay for overtime on public holidays.

Does overtime include break times?

No. Break times are not counted as overtime unless the worker must work through the break (Section 60A(1)).

Can shift workers refuse overtime?

Yes, unless their contract says otherwise. However, some industries (e.g., healthcare, manufacturing) may require overtime work.

What should employees do if they are not paid overtime?

Employees can report unpaid overtime to the Department of Labour Malaysia. Employers can be fined up to RM50,000 for breaking the law.

Proper overtime calculation is essential for legal compliance, employee satisfaction, and smooth payroll management.

Employers must follow Malaysia’s Employment Act 1955 to maintain a fair workplace and avoid penalties.

Understanding overtime rules helps create a transparent and productive work environment.

Are you Hiring in 2025?

Start your hiring journey with Ajobthing today! Post your job ads, connect with top talents, and streamline your recruitment process with our easy-to-use platform.

Read More: