Published: 14 December 2013
Last Updated: 24.06.2017
1. Are employers required to notify the Department of Labour if they intend to terminate the service of workers?
- Employers are required to report to the nearest Department of Labour to fill in Form PK and Appendix 1 within 30 days of terminating the service of workers.
2. What is the voluntary separation scheme (VSS)?
- Voluntary termination in accordance with a better package offered by
1. How do I find a job/an employee?
1. How do I apply for the SBGP-OKU grant?
- You must complete Form SBGP-OKU and meet the requirements of the checklist then submit the form to the Labour Office nearest to your place of business.
1. What should be provided by the employer when hiring an employee?
- The employer must provide a contract of service and furnish a copy to the employee once the employee begins his service.
2. Is it possible to change the conditions of service?
- Any conditions of service less favourable to the employee shall be void and of no effect if it is not in accordance with the terms and conditions set out in the Employment Act 1955.
3. What is the responsibility of the employer if he wishes to terminate the service of workers?
- Salary in lieu of notice if the employer did not give adequate notice
- Termination benefits for employees who completed 12 consecutive months of service with the same employer
- Annual leave if eligible
- Other payments entitled by an employee for example balance of salary
4. What is the period of termination notice to be given by the employer or the employee? If it is not stated in the contract of service, the period is as follows:
- Less than two years of service - 4 weeks’ notice or 4 weeks’ wages in lieu of notice
- Two years but less than five years of service - 6 weeks’ notice or 6 weeks’ wages in lieu of notice
- Five years of service and more - 8 weeks’ notice or 8 weeks’ wages in lieu of notice
5. What should be done by the employer/employee if either party intentionally breaches the contract of service?
- Either party may terminate service without notice in the event of an intentional breach of the contract of service.
6. What action should be taken when employees commit an offence?
- The employer may dismiss without notice or demote the employee or impose appropriate lenient punishment without affecting his salary once an internal inquiry has been conducted.
1. What is the minimum salary of employees covered by the Employment Act 1955?
- From 1 April 2012, it covers employees with salaries up to RM2,000 per month (excluding manual workers who have no salary limit)
2. When is the last period of payment of wages?
- Not later than the seventh day of any wage period
3. When must all payments be made if the service of an employee is terminated?
- Not later than the day the contract is terminated
4. When must all payments be made if the employee himself resigns?
- Not later than the third day the contract is terminated by the employee
5. Do wages need to be paid if the employee is absent due to attendance in court or imprisonment?
- Wages need not be paid to the employee for the above reasons save for being a witness on behalf of his employer.
6. Can wage deduction be made in the event of overpayment that occurred in the past five months?
- Wages can be deducted only in the prior three months due to the employer’s error.
7. Can deductions be made for uniforms or medical bills?
- Yes, when authorised by the Director-General of the Department of Labour.
8. Can payment of wages be made by the employer through a bank or by cheque?
- Yes, provided with an approval letter from the employee.
9. What is meant by rate of normal wages?
- Rate of normal wages for employee with monthly wages is calculated using this formula:
- Rate of normal wages for employees with weekly wages is calculated using this formula:
1. Are female employees allowed to work at 12.00 midnight?
- Not between 10.00 pm and 5.00 am, unless with the permission of the Director-General.
2. In which sectors are female employees prohibited from working?
- Industrial or agricultural sector and work underground
3. How many days of paid maternity leave are female employees entitled to?
4. Is a female employee entitled to maternity pay/allowance if she already has five children?
- Eligibility for maternity pay/allowance is to the extent of five surviving children.
5. What is the entitled amount of maternity allowance?
- Monthly paid employees are deemed to have received maternity allowance when they continuously receive the monthly salary. However, for those who are paid a daily/hourly/rate wage, the total maternity allowance must be equal to the ordinary rate of pay per day and if less than RM6.00, at least RM6.00 a day is to be paid.
6. Can maternity leave be taken prior to delivery?
- Maternity leave may be taken in advance upon confirmation from a medical officer or registered medical practitioner appointed by the employer. The employee may take maternity leave at any time within fourteen days prior to the date of delivery.
7. Is a female employee eligible for maternity leave when she resigns when she is five months pregnant and subsequently works for another employer?
- Yes, provided she is employed by the employer on any day within the four months prior to delivery and employed for at least ninety days during the period of pregnancy.
8. What are the eligibility requirements for maternity allowance?
- Giving birth to up to five surviving children
- Employed on any day within four months prior to delivery
- Employed for at least ninety days during the period of pregnancy
9. What is the limit of overtime?
10. How many work hours are allowed in a day?
- Not more than eight hours a day
- Not more than 5 consecutive hours without a break of not less than thirty minutes
- Not exceeding ten hours a day
- Not exceeding forty-eight hours a week
- Not exceeding 12 hours per day for employees working on shift
11. What if an employee works on a weekly rest day?
- Employers are required to pay for work on weekly rest day as follows :
Monthly wages: If working less than half of the normal working hours, the payment is equal to half a day’s pay at the rate of normal wages. If working more than half but not more than the normal working hours, the payment is equal to one day’s wage at the rate of normal wages.
Daily/Hourly/Rate wage: If working less than half of the normal working hours, the payment is equal to one day’s wage at the rate of normal wages. If working more than half but not more than the normal working hours, the payment is equal to two days’ wages at the rate of normal wages.
12. How is overtime calculated?
- Working on a normal day at a rate of one-half (1.5)
Wage ÷ 26 ÷ 8 X 1.5 X Total Overtime Hours
Wage ÷ 8 X 1.5 X Total Overtime Hours
- Working on weekly rest day at a rate of two (2.0)
Wage ÷ 26 ÷ 8 X 2.0 X Total Overtime Hours
Wage ÷ 8 X 2.0 X Total Overtime Hours
- Working on a public holiday at a rate of three (3.0)
Wage ÷ 26 ÷ 8 X 3.0 X Total Overtime Hours
Wage ÷ 8 X 3.0 X Total Overtime Hours
1. How many weekly days of rest are employees entitled to?
- Employees are eligible for at least one day of rest weekly in 1 week, but if there is more than one day off, then the last day is regarded as the weekly rest day.
2. What is the minimum number of public holidays employees are entitled to in a year?
At least 10 days of gazetted holidays in a year including the following four public holidays:
- Birthday of His Majesty the Yang di-Pertuan Agong
- Birthday of the sultan/ state governor/Federal Territory Day
- Labour Day
- National Day
- Holidays declared under Section 8 of the Holidays Act 1951
3. What is the payment rate for working on public holidays?
- For workers with monthly, weekly, daily and hourly wages, the wage rate is 2 days’ wages at the normal rate. For employees who are paid piece-rate wages, the wage rate is twice the normal rate.
4. What is the total number of days of annual leave an employee is entitled to?
- Less than two years - 8 days per year
- Two to less than five years - 12 days per year
- Five years and above - 16 days per year
5. Under what conditions is an employee entitled to annual leave?
- The employee must be employed for a period of 12 consecutive months with the same employer, but if the employee is absent from work without the employer’s permission without a valid reason exceeding 10% of the 12 months of working days, the employee has lost the right to annual leave.
6. How many paid days of sick leave is an employee entitled to?
- Less than two years - 14 days per year
- Two to less than five years - 18 days per year
- Five years and above - 22 days per year
- 60 days’ hospitalisation on aggregate
7. Can a medical certificate issued by a dentist be considered as paid sick leave?
- Yes, a medical certificate issued by a dentist can be considered as sick leave.
8. What is the period within which a medical certificate must be submitted to the employer?
- A medical certificate must be submitted to the employer within 48 hours of the start of the sick leave.
9. Is an employee entitled to paid sick leave when she receives maternity allowance?
- An employee is not entitled to paid sick leave for the period in which the employee is entitled to maternity allowance.
10. Are employees entitled to paid sick leave when they had an accident?
- Employees are not entitled to paid sick leave for the period in which they are entitled to disability compensation under the Workmen's Compensation Act 1952 or the periodic payment for temporary disability under the SOCSO Act 1969.
11. Can annual leave be substituted with sick leave when an employee is on annual leave?
- The annual leave is considered as not taken.
1. What is the basic condition relating to termination benefits?
- Contract of service terminated by the employer under a continuous contract of not less than 12 months
2. What is the reason employers are required to pay termination benefits?
- Termination benefits must be paid when employers terminate the contract of service for whatever reason.
3. Are there exemptions to employers from paying termination benefits?
Yes, employers are exempted from paying termination benefits when:
- The contract of service is terminated due to the employee reaching retirement age
- The employee has been terminated under section 14(1)(a) of the Employment Act 1955 after proper inquiry has been conducted
- The employees themselves resign save under section 13(2) or 14(3) of the Employment Act 1955
- An employee whose contract of service is renewed or re-employed provided that the terms and conditions of service are the same or better
4. What is the rate of termination benefits?
Total payment of termination benefits must not be less than the following:
- Less than two years of service - 10 days’ wages per year of service
- More than two but less than five years - 15 days’ wages per year of service
- Five years of service and above - 20 days’ wages per year of service
5. When must termination benefits be paid?
- Termination benefits must be paid on the seventh day from the date the termination is effective.
6. Are employers required to provide details of payment of termination benefits?
- Employers must prepare a statement containing details relating to the calculation of termination benefits.
7. What are the possible scenarios for a lay-off?
- It occurs when the employer is unable to give work to workers where wages are paid based on the work provided in the contract of service for not less than 12 days in any period of four consecutive weeks.
8. What is the lay-off payment rate?
Total lay-off payment must not be less than the following:
- Less than two years of service - 10 days’ wages per year of service
- More than two years but less than five years - 15 days’ wages per year of service
- Five years of service and above - 20 days’ wages per year of service
9. What is the formula to calculate termination and lay-off benefits?
- 12 months’ wages ÷ 365 X Eligible rate X Period of service
10. Does failure by the employer to make lay-off payment result in severance of the contract of service?
- Failure of the employer to make lay-off payment does not result in severance of the contract of service.
1. What is the penalty if the employer is late in paying wages?
- An employer who is late in paying wages is guilty of an offence under section 91(a) and can be fined not more than ten thousand ringgit per offence under section 99a.
2. What is the penalty if the employer makes deductions from wages contrary to section 24?
- An employer who makes deductions from wages is guilty of an offence under section 91(c) and can be fined not exceeding ten thousand ringgit per offence under section 99a.
3. What is the penalty if the employer fails to pay sick leave?
- An employer who fails to pay sick leave is guilty of an offence under section 100(5) and if convicted, the court may order the employer to pay the number of days of sick leave as if a fine is imposed under the same section.
4. What is the penalty if the employer fails to comply with a Labour Court order?
- An employer who fails to comply with the order or decision of the Labour Court is guilty of an offence under section 69(4) (or section 69e for cases filed under section 69b or 69c). Upon conviction, the employer can be punished with a fine not exceeding RM10,000.00 and a daily fine of RM100.00 per day will be imposed for continued offence.
1. What is a Labour Court?
- It refers to inquiry proceeding in which the Director-General and officers authorised by the Director-General hear and decide on complaints relating to wages and other payments under the contract of service and statutory payments provided for under the Employment Act 1955 and Wages Councils Act 1948.
2. What is the objective of the Labour Court?
- The objective is to resolve disputes in a simple, inexpensive and quick manner.
3. How long does it take to settle a case at the Labour Court?
- In general, the target set for the settlement of cases is not more than three (3) months depending on the complexity of the laws involved.
4. Who can make a complaint at the Labour Court?
- Employees who fall under the definition of an employee under the First Schedule of the Employment Act 1955. Employees who do not fall under the definition of the First Schedule can file a complaint under the provisions of section 69b. Employers may lodge a complaint for indemnity claim notice under either section 69 or section 69c whichever is relevant.
5. What is the maximum number of claims in the Labour Court?
- The Labour Court does not have a limit for claims.
6. What is the cost of filing a complaint at the Labour Court?
- Filing a complaint is free. The costs involved such as transport are borne by the parties concerned.
8. Can a lawyer be present to represent a party in Labour Court proceedings?
- There is no provision for representation under the Employment Act 1955. However, the officer handling the case may use the power of discretion to permit any party in the case to be represented. Any party to the case that wishes to be represented must submit a letter of authority to act before the case begins.
9. If an order made on my behalf was not observed, what further action can be taken?
- When an order is not observed by the party it is made against, the order can be enforced by a sessions or magistrate’s court as if the order was made by the court concerned. Furthermore, failure to comply with an order or decision is an offence under section 69(4) and section 69e.
10. If I am not satisfied with the decision or order made, can it be appealed against?
- An appeal against the decision or order can be made in the High Court within fourteen days of the date of making the decision or order.
11. What is the appeal process?
- An appeal is made by filing four (4) copies of notice of appeal with a filing fee of RM100.00 in the form of revenue stamps. In addition, the appeal must include an appeal deposit of RM250 in the form of money order or bank draft. All the specified matters must be submitted to the Labour Office where the order or decision is made within fourteen (14) days of the date of making the decision or order.
1. How do I file a complaint?
- Complaints can be made by going personally to the nearest Labour Office.
1. What is the period within which an employer must report an accident involving his foreign workers?
- Accidents involving foreign workers must be reported by the employer within ten (10) days of the date of the accident.
2. What type of insurance must be taken by employers when employing foreign workers?
- Employers of foreign workers must insure themselves with an insurer appointed as a panel under the Foreign Worker Compensation Scheme.