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As more companies shift toward growing their remote workforce, it has become common for employees to relocate to new countries and for businesses to hire candidates living all over the world.
While this presents tremendous opportunities for businesses that can cast a significantly wider net when hiring for available roles, it also means that employers will need to learn about the local tax and labor regulations in countries where they may not typically operate in.
Partnering with an employer of record (EOR) like Skuad is the safest option for companies interested in hiring in Malaysia because we can hire employees on your behalf through our local legal entity, which means you won't assume any of the risk associated with international hiring.
Regardless of how you go about hiring employees in Malaysia, you should consider how local regulations and employee entitlements will impact your business's operations. Continue reading to learn about the laws surrounding various employee leave policies in Malaysia.
Annual leave in Malaysia
Employees in Malaysia are entitled to paid annual leave time each year. Employees accrue a minimum amount of annual leave based on their length of service with a company. Below are the minimum leave annual leave times that employees in Malaysia are entitled to:
The above leave time is a mandated minimum. However, employers in Malaysia should consider offering employees additional days off or supplementary leave types. In addition to their annual leave time, employees in Malaysia are entitled to public holidays, for which they do not have to use annual leave time.
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Talk to an expertPublic holidays in Malaysia
Public holidays in Malaysia vary by state, and employees are entitled to take this time off. When a holiday falls on a weekend day, employers will grant the following Monday for employees to observe the holiday (e.g., New Year's Day falls on Sunday this year).
Below is a list of the 13 national public holidays employees in Malaysia are entitled to, and the date and day of the week they fall on. In addition, this table shows the public holidays that the majority of the nation will be given time off.
However, employers should note that employees may be entitled to several more regional holidays not listed below.
Malaysia Public Holiday Calendar
According to Malaysian laws, all employees are entitled to about 12 or 13 paid public holidays. The number slightly changes from state to state. Also, if a public holiday falls on a rest day, the next day is considered a paid holiday for the employees. If the employees work on a holiday, they are given the pay equivalent to their three-day monthly income.
Below is a list of public national holidays in Malaysia in -
National except Johor, Kedah, Kelantan, Perlis & Terengganu
Chinese New Year - National
Chinese New Year Holiday -National
Chinese New Year Holiday -National except Johor & Kedah
Nuzul Al-Quran - National except Johor, Kedah, Melaka, Negeri Sembilan, Sabah & Sarawak
Hari Raya Aidilfitri - National
Hari Raya Aidilfitri Holiday - National
Labour Day - National
Wesak Day -National
Agong's Birthday - National
Hari Raya Haji - National
Awal Muharram - National
Awal Muharram Holiday -National except Johor, Kedah, Kelantan & Terengganu
Merdeka Day -National
Prophet Muhammad's Birthday - National
Malaysia Day - National
Malaysia Day Holiday -National
Deepavali - National except Sarawak
Christmas Day - National
Below is a list of public state holidays in Malaysia in -
YDPB Negeri Sembilan's Birthday - Negeri Sembilan
YDPB Negeri Sembilan's Birthday Holiday -Negeri Sembilan
Thaipusam -Johor, Kuala Lumpur, Negeri Sembilan, Penang, Perak, Putrajaya & Selangor
Federal Territory Day -Kuala Lumpur, Labuan & Putrajaya
Israk and Mikraj - Kedah, Negeri Sembilan, Perlis & Terengganu
Independence Declaration Day - Melaka
Installation of Sultan Terengganu - Terengganu
Awal Ramadan - Johor, Kedah & Melaka
Sultan of Johor's Birthday - Johor
Good Friday - Sabah & Sarawak
Sultan of Terengganu's Birthday -Terengganu
Raja Perlis' Birthday - Perlis
Hari Hol Pahang - Pahang
Hari Hol Pahang Holiday -Pahang
Harvest Festival - Labuan & Sabah
Harvest Festival Holiday - Labuan & Sabah
Hari Gawai - Sarawak
Hari Gawai Holiday - Sarawak
Hari Gawai Holiday - Sarawak
Arafat Day -Kelantan & Terengganu
Hari Raya Haji Holiday - Kedah, Kelantan, Perlis & Terengganu
Sultan of Kedah's Birthday - Kedah
Georgetown World Heritage City Day - Penang
Georgetown World Heritage City Holiday - Penang
Penang Governor's Birthday - Penang
Sarawak Day - Sarawak
Sultan of Pahang's Birthday - Pahang
Melaka Governor's Birthday - Melaka
Merdeka Day Holiday -Kelantan & Terengganu
Sultan of Kelantan's Birthday -Kelantan
Sultan of Kelantan's Birthday Holiday - Kelantan
Sabah Governor's Birthday - Sabah
Sarawak Governor's Birthday - Sarawak
Sultan of Perak's Birthday - Perak
Sultan of Selangor's Birthday - Selangor
Christmas Eve - Sabah
*Dates of these holidays and observances may change based on religious calendars.
Sick leave in Malaysia
Employees in Malaysia are entitled to sick leave. However, employers can refuse to compensate the employee for these days unless the employee receives a doctor's note. If employers require a doctor's note, they will be financially responsible for the employee's doctor's visit.
The number of sick days that employees are entitled to increases based on tenure. Below are the minimum sick day allotments for employees in Malaysia:
Emergency leave in Malaysia
When employees in Malaysia require hospitalization, they are granted additional leave time. In the event that an employee's sickness requires them to be hospitalized, they are entitled to 60 days of paid emergency sick leave per year.
Family leave in Malaysia
All full-time employees in Malaysia are entitled to certain allocations of family leave. Employers will need to have a compliant family leave policy in Malaysia that provides employees with time off and compensation for family leave.
Maternity leave in Malaysia
Employees in Malaysia are entitled to a statutory minimum of 98 days as per labour law.
Paternity leave in Malaysia
Employees in Malaysia's public and private sectors are entitled to seven days of paternity leave. However, this entitlement only applies to employees who are married to the individual who gave birth.
In addition, the seven days of paternity leave refers to the total time the employee is entitled to take off and does not mean seven business days of leave.
Adoption leave
Employees are not currently protected by any adoption leave policy in Malaysia. Therefore, any adoption leave entitlements employees currently enjoy in Malaysia are supplementary and offered at the employer's discretion.
Carer's leave
Because there are not currently any carer's leave benefits outlined in the Malaysian Employment Act, employees are not legally entitled to these benefits, which means that providing these benefits is optional for employers.
Childcare Leave
Minimum mandate is 6 days per annum as per labor law. The child must be 6 years or younger.
Rest Day in Malaysia
Malaysian employees are entitled to at least one rest day per week. While it is common for rest days to fall on a Sunday, if it's essential for an employee to work on the weekend, they must receive a rest day on a different day of the week.
When employers require an employee to work on their rest day for any reason, they must compensate the employee at a minimum rate of twice their standard hourly wage.
Compassionate leave in Malaysia
Employers in Malaysia are not required to provide employees with compassionate leave, but this is a common unpaid benefit many employers offer their employees. Employers who offer this benefit typically provide employees with between one and three days of unpaid time off when an immediate family member passes away.
Civil service leave
Employees in Malaysia are not entitled to any civil service leave policies (e.g., paid or unpaid time off to perform civic responsibilities like jury duty or voting). It's up to the employer's discretion whether or not they want to provide this supplementary benefit to their employees.
Marriage leave
Employers are not required to have a marriage leave policy in Malaysia, but this is a benefit many employers in Malaysia offer their employees. Employers offering this benefit typically provide employees with three days off to participate in wedding festivities.
Remain compliant when hiring employees in Malaysia
Remaining compliant with all relevant tax and labor laws is essential for employers hiring international employees. This can be an extremely complicated undertaking, especially if you only plan to hire a few employees in a country.
However, any non-compliance with local regulations in Malaysia, even by accident, can carry significant fines and penalties for employers. For example, suppose you want to hire one or more employees in Malaysia but are unfamiliar with local laws, the securest way to do so is by utilizing an EOR.
Skuad's EOR services protect international employers because we take on the burden of managing payroll, onboarding, benefits, and more for international employees. Thus, you are free to pursue the best talent globally without fear of any financial or legal repercussions. Request a demo to start compliantly hiring employees in Malaysia today.
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