Severance Payments

Employees with wages of up to RM4,000/month, employed for 12 months or more, are entitled to the following minimum statutory severance payments according to the Employment (Termination and Lay-Off Benefits) Regulations 1980:

Length of service	Severance payment
< 2 years	10 days’ wages
2 ~ 5 years	15 days’ wages
> 5 years	20 days’ wages

For employees with wages exceeding RM4,000/month, entitlement to severance payments depends on the employment contract. If the contract is silent, there is no statutory right to termination benefits. However, in some circumstances, there is a general expectation that a financially able employer should pay reasonable severance compensation.

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