— Applicable Labour Law
Employment Laws by Region
The employment laws that apply differ from region to region in Malaysia:
Peninsular Malaysia & Federal Territories
Employment Act 1955
The Employment Act 1955 applies.
Sabah & Sarawak
Labour Ordinance
Each state applies its own Labour Ordinance.
With the 2025 amendments, employment protections across the regions have largely converged and now generally apply to all employees. In Sabah and Sarawak, for example, the amended Labour Ordinance took effect on 1 May 2025, extending coverage to all employees (previously it applied only to lower-paid employees), with working hours, maternity leave and other standards adjusted at the same time.
For most Chinese companies setting up in Peninsular Malaysia, the Employment Act is the main basis for day-to-day staff management.
— Minimum Wage
Minimum Wage Requirements
RM1,700
National Minimum Wage
Per month
Malaysia’s national minimum wage is RM1,700 per month and applies to employees including foreign and part-time employees, except where the law provides otherwise.
— Working Hours & Leave
Working Hours, Leave and Notice Periods
Employers must comply with statutory rules on working hours, overtime, rest days, public holidays and employee leave. The main minimum entitlements include:
Key point: the above are statutory minimums. Employment contracts and staff handbooks may offer more favourable terms, but never less than the statutory standard. The exact number of days of annual leave, sick leave and notice increases with length of service (typically in three tiers: under 2 years, 2 to 5 years, and over 5 years).
— Statutory Contributions
Mandatory Contributions and Deductions
Employers must generally register eligible employees and pay the relevant statutory contributions, including:
A few practical tips:
— Foreign Employees
Employing Foreign Nationals
Foreign professionals generally need to apply for an Employment Pass (EP) or another applicable work pass. Depending on the circumstances, the application may also involve:
Employment Pass Salary Thresholds
From 1 June 2026, all new and renewal applications must meet higher minimum salary requirements:
The implementation date for the succession plan has been postponed to 1 January 2027. In May 2026, the relevant authorities (including MyXpats Centre and MDEC) issued a notice on this and encouraged companies to start preparing and organising the relevant documents before January 2027. Accordingly, companies submitting Category II and Category III applications before 1 January 2027 may temporarily omit the succession plan, but are advised to prepare it early.
Implications for overseas companies: companies planning to second foreign managers or technical staff should, at the landing-planning stage, work out whether the foreign employees’ salary levels, the company’s capital and its business type meet ESD requirements, and allow enough time for pass approval.
— Practical Tips
Practical Employment Management Tips
— How We Help
How We Can Assist
Yingke Malaysia can help clients understand the basic employment regulations and cost components of hiring in Malaysia, explain the registration process for statutory contributions such as EPF, SOCSO and EIS, connect clients with payroll and HR service providers, and help clients understand the work pass application requirements and procedures for foreign employees. For specific employment contract terms and labour disputes, we recommend consulting a legal adviser (Y KONG, WONG AND PARTNERS) or an HR professional separately.
※This page is for general reference only and does not constitute legal, human resources or tax advice. Malaysian labour laws, the minimum wage, statutory contribution rates, work pass conditions and approval policies may change from time to time; please refer to the latest provisions of the Ministry of Human Resources, the Labour Department, EPF, SOCSO, the Expatriate Services Division (ESD), the Immigration Department and other relevant authorities. The rules that apply may differ by industry, company size and category of employee. Before making any hiring or secondment decision, please verify the latest requirements with the relevant authorities and consult a qualified lawyer or HR consultant. Yingke Malaysia accepts no responsibility for decisions made in reliance on this page or for any loss arising from it.