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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