Malaysia

CURRENCY
Renminbi

FISCAL YEAR
1st January – 31st December

MIN. WAGE
RM1,000 per month

WORKING CONDITIONS
See conditions below

PAY FREQUENCY
Monthly

Employment & Payroll

It is advisable to have a written Employment Agreement (also known as Appointment Letter) where the employee and employer agree on specific terms and conditions of the employment. Salaries are paid on monthly basis. Salaries are paid at the end of each month.

Minimum Wage

The minimum wage for employees in Peninsular Malaysia will be raised by RM100 to RM1,000 per month starting from 1 July 2016

    HR & Labour

    Working hours are limited by:-

    1. Five consecutive hours with a period of rest for at least 30 minutes (any break of less than 30 minutes in the five consecutive hours shall not break the continuity of that five consecutive hours) or 8 hours must include a period of rest (including meal) of at least 45 minutes;
    2. Eight hours in one day;
    3. a spread-over period of not exceeding 10 hours in one day/48 hours in one week.

    Immigration

    There are three main types of work visa or pass in Malaysia:

    • Professional Visit Pass (PVP)
    • Employment Pass
    • Visitor’s Pass/Temporary Employment

    Other work visas or passes include:

    • Visitor’s Pass (Professional)
    • Malaysia Automated Clearance System (MACS)
    • Short Term and Long Term Social Visit Pass

    Getting an employment pass can be a long process, but harsh penalties apply for those who are caught without a valid pass. A work pass is usually valid for six months to five years.

    Statutory Payments

    SOCSO: Only Malaysian citizens and permanent residents are eligible to contribute to SOCSO and to benefit from its services. The following individuals are exempt from paying SOCSO:

    • Business owners and their spouses
    • Domestic servants
    • Foreign workers
    • Government employees
    • Self-employed people

    Amount paid into the scheme depends on an employee’s earnings.

    EPF:

    Employer

    • Monthly wages RM5,000 and below – Minimum of 13% of the employees’ monthly wages
    • Monthly wages exceed RM 5,000 – Minimum 12% of the employees’ monthly wages

    Employee

    • Minimum of 11% (or) 8% of the employees’ monthly wages

    Worker’s Compensation

    Employers must take out an insurance policy to cover liability under the act. Foreign workers are covered under Foreign Worker’s Scheme in respect of compensation for employment injury as well as non-employment injury vide Workmen’s Compensation.

    Leave Entitlements

    Annual Leave: An employee shall be entitled to paid annual leave of:

    • eight days for every twelve months of continuous service with the same employer if he has been employed by that employer for a period of less than two years;
    • twelve days for every twelve months of continuous service with the same employer if he has been employed by that employer for a period of two years or more but less than five years; and
    • sixteen days for every twelve months of continuous service with the same employer if he has been employed by that employer for a period of five years or more

    Sick Leave: Employee shall be entitled to paid sick leave

    • of fourteen days in the aggregate in each calendar year if the employee has been employed for less than two years;
    • of eighteen days in the aggregate in each calendar year if the employee has been employed for two years or more but less than five years;
    • of twenty-two days in the aggregate in each calendar year if the employee has been employed for five years or more; or
    • of sixty days in the aggregate in each calendar year if hospitalisation is necessary, as may be certified by such registered medical practitioner or medical officer

      Terminations

      Either the employer or employee can terminate the contract of service by giving an advance notice in writing to each party as stated in the terms of contract. If either the employer or employee decide to terminate without notice, the initiate party will have to pay to the other party an indemnity of a sum equal to the amount of wages which would have accrued to the employee during the term of such notice or during the unexpired term of such notice.

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