Maternity And Paternity

Many employers have been providing a few days’ paternity leave for their employees on a
discretionary basis. However, in 2022 it became compulsory under the Employment Act to provide
this benefit. The conditions are that the leave is for seven consecutive days, it is restricted to married
employees, no more than five confinements and the employee must have served his employer at
least 12 months prior to taking the leave.

Rest Day

Section 59 of the Employment Act stipulates that all employees are entitled to two rest day per
week. An employee may not be required to work on his rest day, except in circumstances stated in
the law. When an employee works on a rest day, he will be entitled to premium rates of pay.

Public Holidays

Section 60D entitles all workers covered by the Employment Act to a minimum of 11 paid gazetted
public holidays per year. Five of the holidays are specified by the Act and must include:

1. National Day

2. The Yang di-Pertuan Agong’s Birthday

3. The State Ruler’s Birthday

4. Labour Day

5. Malaysia Day

The other six holidays will be chosen by the employer. However, under the Sabah Labour Ordinance,
employees must be provided with 14 public holidays per year, and the Sarawak Labour Ordinance
makes it compulsory for employers to grant workers 16 public holidays per year.

To prevent absenteeism at holiday time, the Acts provide that if a worker is absent without the
employer’s consent on the day immediately before or after a public holiday, he is not entitled to
holiday pay. If an employee is required by his employer to work on a holiday, he is entitled to two
days’ extra wages
Incentives and Commissions

An incentive is a reward or benefit that is given to an employee for achieving a desired outcome
while a commission is a percentage of the sales that an employee generates.

Examples of incentives:

Bonuses: Bonuses are a lump sum of money that is paid to an employee based on their
performance.

Stock options: Stock options give employees the right to buy shares of the company’s stock at a
discounted price.

Non-monetary incentives: Non-monetary incentives are rewards that are not financial in nature.
They can include things like time off, recognition, or gifts.

Commission examples:

Sales commissions: Sales commissions are a percentage of the sales that an employee generates.

Retail commissions: Retail commissions are a percentage of the profit that an employee generates
from sales.

Service commissions: Service commissions are a percentage of the fees that an employee generates
from services.

Employees Provident Funds (EPF)

Employees’ Provident Fund (EPF; Malay: Kumpulan Wang Simpanan Pekerja, KWSP) is a federal
statutory body under the purview of the Ministry of Finance. It manages the compulsory savings
plan and retirement planning for private sector workers in Malaysia. Membership of the EPF is
mandatory for Malaysian citizens employed in the private sector, and voluntary for non-Malaysian
citizens.
Social Security Organization (SOCSO)

There are 2 schemes that are governed under the Employees’ Social Security Act 1969 – the
Employment Injury Scheme that protects an employee against occupational accident or disease, and
the Invalidity Scheme that insures an employee who is unable to work due to incurable or unlikely to
be cured condition or death. It is compulsory for all Malaysian and permanent resident employees to
register with SOCSO except for Federal and State Government permanent employees, domestic
servants, and those who are self-employed. Foreign workers are protected under SOCSO as well
since January 2019

Employment Insurance Systems (EIS)

Governed under the Employment Insurance System Act 2017 and administered by SOCSO as well,
this insurance protects employees aged 18 to 60 who have lost their employment except in the case
of voluntary resignation, expiry of the contract, unconditional termination of the contract,
completion of a project specified in a contract, retirement, and dismissal due to misconduct.