The Employment Act 1955

The Employment Act 1955 is the main legislation that regulates the terms and conditions of employment in Malaysia. It applies to employees whose wages do not exceed RM4,000 per month, who are engaged in manual labor, or who perform supervisory or managerial functions.

The Act covers various aspects of employment, such as contracts of service, payment of wages, deductions from wages, priority of wages, rest days, hours of work, holidays, annual leave, sick leave, maternity protection, termination of contract, and more.

Employees whose salary exceeds RM4,000 will not be subject to the following:

• Overtime pay for rest days
• Overtime beyond normal working hours
• Shift work allowance
• Overtime and allowances on public holidays
• The holiday falls on half a working day and is paid at one day's ordinary wage
• Dissolution and retirement benefits

Employers in Malaysia must follow strict employment labor laws when hiring, managing, and terminating staff. This includes obtaining approval for foreign employees, managing leave and working hours, registering with the Employees Provident Fund, creating employment contracts, and providing severance payments.

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