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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Public 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 in 2023 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 to observe in 2023.
However, employers should note that employees may be entitled to several more regional holidays not listed below.
Malaysia 2023 Public Holiday Calendar
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 the following maternity leave benefits according to the Malaysian Employment Act:
- Employees are entitled to a minimum of 60 consecutive days of maternity leave that they can begin taking anywhere between 22 weeks into their pregnancy and 14 days prior to their projected due date.
- Employees may take longer than the traditional 60-day period if their doctor deems it medically necessary.
- Employees are entitled to receive compensation commensurate with their standard rate of pay during their maternity leave unless it is less than the maternity leave rate stated in section 102 (2)(c) of the Malaysian Employment Act, in which case they will receive the mandated pay rate instead.
- Employees are allowed a 90-day buffer period after their maternity leave closes to return to work without retaliation from their employer.
You are only required to provide pregnant employees with maternity leave if they meet the following requirements:
- They have been your employee for at least 90 days within nine months of their projected due date.
- They have fewer than five children.
Paternity leave in Malaysia
As of January 1, 2023, 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.
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.
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.
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.
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.