Employment Contracts in Malaysia

Information on employment law and what a Malaysian employment contract should include...

In Malaysia employment law is outlined in the Employment Act 1955 and the Industrial Relations Act 1967, which deal with relations between employers, employees and trade unions. The Employment Act gives minimum terms and conditions for manual workers and non-manual workers who earn less than a defined amount. It covers full-time, part-time, temporary and contract employment.

Part-time work is classed as being employed for less than 70 percent of the time of a full-time employee in a similar job. Casual workers, who are hired only when needed, are not covered by the Employment Act.

Working hours

Working hours for employees covered by the Employment Act must conform to the following:

  • Maximum of 48 hours per week
  • No more than eight hours of work per day
  • Maximum of ten hours of work spread over a day
  • No more than five hours straight without a minimum rest period of 30 minutes
  • One day off per week

Employment contracts

Anybody employed in Malaysia for longer than one month must have a written employment contract or "contract of service", which should include:

  • Names of the both the employee and the employer
  • Date on which the employment begins
  • Place of work and employer's address
  • Job title, or a brief description of the job
  • Salary, including details of any bonuses or allowances
  • Terms and conditions of employment (relating to holiday entitlement, sick pay, overtime, probation and working hours)
  • Required notice period
  • Retirement age

A written employment contract should be received before starting work. An oral agreement is sufficient for employment lasting less than a month.

Minimum wage law

Minimum wage law applies to some industries and sectors in some territories. Many employees have jobs for which there is no legal minimum wage.

Further Information