Employment Law in Malaysia

Clear, practical support for employers and employees

Whether you are an employer wanting the right contracts and policies in place, or an employee facing a difficult situation at work, we can help you understand your rights and responsibilities under Malaysian law — and handle matters calmly and correctly.

How we help

We advise both employers and employees, in plain language.

For employers, we can help you:

draft and put in place employment contracts, offer letters and staff handbooks;
prepare workplace policies — including on data protection, discipline and sexual harassment;
meet your duties under the Personal Data Protection Act when handling employees' personal data;
manage dismissals, discipline, retrenchment and voluntary separation schemes (VSS) fairly and correctly;
respond to unfair dismissal claims and represent you before the Industrial Relations Department and the Industrial Court.

For employees, we can help you:

understand your rights and read your employment contract before you sign;
get advice if you are facing dismissal, feel forced to resign (constructive dismissal), or are affected by retrenchment;
bring an unfair dismissal claim — making representations and representing you in the Industrial Court;
deal with issues such as unpaid wages, benefits, and workplace sexual harassment.
We also help both sides with negotiations and settlement discussions.

Frequently Asked Questions

Does the Employment Act 1955 apply to me?

The Employment Act 1955 is the main law on basic working rights in Malaysia. Since the Employment (Amendment) Act 2022 came into force on 1 January 2023, it applies to almost all employees, whatever their pay. Some rights — such as overtime pay — still depend on how much you earn. If you are unsure whether a particular right applies to you, it is worth asking a lawyer.

What is the minimum wage in Malaysia right now?

From 1 August 2025, the national minimum wage is RM1,700 a month, and it applies to all employers. It first applied from 1 February 2025 to larger employers, with smaller employers given more time. The rate is set by an order that can be updated, so please check the current figure.

What are the maximum normal working hours each week?

Under the Employment Act 1955, as amended in 2023, normal working hours should not be more than 45 hours a week. Work beyond your normal hours may count as overtime, which can attract extra pay for eligible employees. The rules on rest days, public holidays and overtime can be detailed, so a lawyer can help you work out what applies.

How much maternity and paternity leave can I take?

Under the current Employment Act 1955, an eligible employee is entitled to 98 days of paid maternity leave, and an eligible married male employee is entitled to 7 consecutive days of paid paternity leave. There are conditions for each, such as length of service. If you are planning leave, a lawyer can help you check whether you qualify.

Can my employer dismiss me without giving a reason?

In Malaysia, an employer generally needs a valid reason — known as "just cause or excuse" — to dismiss an employee. If you are dismissed without just cause or excuse, the law may treat this as an unfair dismissal, dealt with under the Industrial Relations Act 1967. If you think your dismissal was unfair, speak to a lawyer promptly, because there are time limits.

What is constructive dismissal?

Constructive dismissal is when you resign because your employer has seriously broken the terms of your employment, leaving you no real choice but to leave — for example a sudden cut in pay or an unjustified demotion. The law may treat this as a dismissal by the employer, not a simple resignation. These claims can be difficult to prove, so it is wise to get legal advice before you resign.

What is retrenchment, and what is a voluntary separation scheme?

Retrenchment is when an employer ends jobs because they are no longer needed, for example during a reorganisation or downturn; employers are expected to follow a fair process and, for eligible employees, to pay termination benefits. A voluntary separation scheme (VSS) is where employees are invited to leave in return for a benefits package. Before you accept a VSS or agree to a retrenchment, it can help to have the terms checked by a lawyer.

I have been dismissed. What can I do?

If you believe you were dismissed without just cause or excuse, you can make written representations asking to be reinstated. Under the Industrial Relations Act 1967, this must be done within 60 days of your dismissal, so acting quickly matters. The Industrial Relations Department will try to help both sides reach a settlement, and if there is no settlement, the matter can be referred to the Industrial Court.

What can I do if I face sexual harassment at work?

Sexual harassment is unwanted conduct of a sexual nature, and no one should have to put up with it at work. You can raise a complaint with your employer, who has duties to look into such complaints. Malaysia also has the Anti-Sexual Harassment Act 2022, which set up a Tribunal for Anti-Sexual Harassment where a person can seek redress. A lawyer can explain the options, including a police report where the conduct may be a crime.

Should my employment terms be in writing?

It is good practice for the main terms of employment to be set out in a written contract. The Employment Act 1955 requires certain contracts to be in writing and to include a clause on how disputes are handled. A clear contract helps both the employer and the employee understand what has been agreed.

What should an employment contract include?

A good written contract usually covers the job title and duties, pay and benefits, working hours, leave, the probation period, notice periods, and how the employment can be brought to an end. For employees covered by the Employment Act 1955, certain terms must be in writing, including a clause on how disputes are handled. Getting the contract right from the start helps both sides avoid misunderstandings later, so it is worth having one prepared or reviewed by a lawyer.

Does the Personal Data Protection Act apply to how we handle employee data?

When a business collects and uses its staff's personal information — for recruitment, payroll, benefits or performance — the Personal Data Protection Act 2010 is relevant to how that data is handled. Following amendments in 2024, organisations have clearer duties, which can include appointing a data protection officer and reporting certain data breaches. It is good practice, and increasingly expected, for employers to have a privacy notice and proper policies for staff data — and we can help you put these in place.

Employment Law in Malaysia | Khaw Ewe Seng & Co, Penang

Employment law help in Penang for employers and employees — employment contracts, workplace policies, PDPA/data protection, dismissal, retrenchment and Industrial Court claims.