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Blog Difference between the contract of service and contract for service
1. Is EPF compulsory for all employees even though employees agree on the EPF non-deduction?
We shall explain the important differences between Contract of Service and Contract for Service.
Contract of Service
sub-contractor providing services to the client. The services could be an assignment or project.
THK Management Advisory Sdn Bhd
Wage period will be one month and the payment of wages cannot be later than the
seventh day after the last day of the wage period.
The wages must include lawful deductions such as EPF, SOCSO, EIS and PCB.
Working hours will be 8 hours a day and total more than 48 hours a week.
Maternity protection
No statutory benefit for independent contractors and sub-contractors. Only follow the terms and
conditions stated in the contract agreement.
ABC Sdn Bhd is a manufacturing company. They hire an internal worker to do the daily cleaning job in the
factory. The company and worker have signed an employment contract. This worker also can enjoy the EPF,
SOCSO, EIS, and paid leave which are provided by ABC Sdn Bhd. This kind of relationship between employer
and employee will be a contract of service.
ABC Sdn Bhd is a manufacturing company. They engaged a sub-contractor to provide cleaning services
for the factory once a week. ABC Sdn Bhd only paid the cleaning fee and without EPF, SOCSO & EIS to the
sub-contractor which was agreed and stated in the signed contract. This kind of relationship between
contractor and client will be a contract for service.
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Published : 15-Feb-2022
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