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In Malaysia, an employee is entitled to paid annual leave based on the length of service with their employer:

• After 12 months of continuous service with the same employer, employees are entitled to 8 days of paid annual leave for the first 2 years of their employment
• 12 days of leave for 2 to 5 years of service with the same employer
• 16 days of leave for over 5 years of working for the same employer.

Annual leave days are paid at the employee’s ordinary wage rate and can be carried over to the next year.

Annual leave entitlement may be canceled in cases where an employee misses work without the permission of the employer, and without reasonable excuse, for more than 10% of working days during the 12 months of the continuous service cycle.

To claim paid sick leave, an employee must be examined by a registered medical practitioner (chosen by the employer, and at the employer's expense), who determines whether sick leave may be granted. The duration of paid sick leave depends on the length of employment with the current employer:

• 14 days in total per calendar year for less than 2 years of employment
• 18 days in total per calendar year for 2 to 5 years of employment
• 22 days in total per calendar year for over 5 years of employment
• 60 days per year in case of hospitalization, irrespective of the duration of employment

Sick leave is paid at the employee's ordinary wage rate.

Effective January 1, 2023,10/17/2024 KN: Updated Access Dates, References hospitalization leave will be a separate leave from sick leave to provide additional protection for workers. Further details will be released pending published changes to the Employment Act approved earlier this year.

Beginning January 1, 2023, female employees in Malaysia are entitled to 98 days of maternity leave. Passed in March 2022, Act 265 increases the length of maternity leave. Additional protections are in place for pregnant employees by prohibiting companies from terminating employees who are pregnant or have pregnancy-related illnesses.

An employee is entitled to a maternity allowance if she has been employed at any time in the 4 months leading up to her confinement, and for a total of at least 98 days in the nine months before confinement. An employee is not eligible for a maternity allowance if, at the time of confinement, she has 5 or more living biological children. The maternity allowance is equal to the daily wages of the employee. The employer pays the total cost of the maternity allowance.

Maternity leave can begin no earlier than 30 days before confinement, and no later than one day after confinement.

Effective January 1, 2023, employees who are married are entitled to 7 days of paid paternity leave. The employee must have been employed by the same employer for at least 12 months immediately before paternity leave starts. The employee is responsible for notifying his employer of his spouse's pregnancy at least 30 days from the expected confinement or as early as possible after the birth.

Pension

All employers are required to register with the Employees Provident Fund’s Board. Contributions are made by both employers and employees at rates tied directly to the wages paid per month for any amount over MYR 10 (Malaysian ringgits). The minimum age to retire is 60.

All employees, including those hired on a contractual basis, are eligible for EPF. The government has also increased the scope of the Self-Employment Social Security Scheme. Additionally, persons in the fishing and farming industries are eligible for social security compensation.

Members can withdraw from their pension funds at age 55 as a lump sum or annuity. Employees younger than 55 can apply to make withdrawals for specific purposes, such as higher education for the employee or their child, construction or purchase of a house for personal use, or permanent emigration from Malaysia. Employees who continue to contribute after 55 years can withdraw funds they contributed after 55 years only when they attain the age of 60 years.

Dependents/Survivors Benefits

In Malaysia, a member of the Employees Provident Fund may nominate another person to be the recipient of any outstanding credit in the event of the employee’s death or incapacitation.

Social Security Fund pays survivors pension if the deceased was under 60 years of age and had made monthly insurance contributions for at least 24 out of the 40 months preceding their death or was in receipt of an invalidity pension. Payments are made to the widow or widower for life, and each child until the child either marries or turns 21, whichever occurs earlier. The dependents are entitled to receive a pension at the rate of 50% of their average assumed monthly wage, increased by 1% for every 12 months’ contributions that are paid in excess of the first 24 months, limited to a maximum of 65%.

Contributions to the scheme are paid by both employees and employers.

Invalidity Benefits

Employees under 60 years old who are incapable of engaging in any substantially gainful activity due to a morbid condition of permanent nature are eligible for pension if they have paid at least 24 monthly contributions during the 40 months prior to the onset of disability. The pension is paid as 50% of the average monthly wage of the employee in the last 24 months, increased by 1% for every year of contributions after the first 24 months, limited to a maximum of 65%.

For temporary disability due to work accidents or diseases, benefits are paid after four days as an amount equivalent to 80% of the average daily wage. For permanent disability, 90% of the average salary is paid as a pension.

Contributions to the scheme are paid by both employees and employers.

In the employment law of Malaysia, a "child" is defined as a person under 15. A "young person" is between 15 and 18 years of age.

While children cannot be engaged in hazardous work, young persons may engage in hazardous work only with personal supervision and under an apprenticeship contract or when undergoing vocational training. Weekly working days for younger persons may not exceed 6 days with a daily work limit of 7 hours (or 8 with school).

Children not younger than 13 may be engaged in light work, public entertainment, apprenticeship work, or work in a school or training institution. Children are not permitted to work for more than 6 days a week and 6 hours per day (or 7 hours, including school).