Malaysia is a country in southeast Asia that is separated by the South China Sea into 2 parts: Peninsular Malaysia and Borneo's East Malaysia. It shares land and maritime borders with Thailand, Brunei, and Indonesia, and maritime borders with Singapore, Vietnam, and the Philippines. Malaysia is a multiethnic and multicultural country, about half the population is ethnically Malay, with minorities of Chinese, Indian, and indigenous peoples. Kuala Lumpur is the capital and has a growing tech sector with highly skilled services professionals.
The minimum wage in Malaysia is MYR 1,500 per month, with a standard workweek of 8 hours per day with a maximum of 45 hours per week. Overtime work is regulated by employment contracts/collective agreements, and is paid between 150%-300% of the regular salary.
Pregnant employees are entitled to paid maternity leave for 98 days, and can start at most 30 days before the due date. Maternity leave in Malaysia only applies for the first 5 children. Fathers can take 7 days of paternity leave after the birth.
Employees can take paid sick leave, the length of which depends on the years of employment:
There are 10 public holidays in Malaysia, and employees are entitled to paid time off each year (the length of which depends on the years of employment):
The termination process in Malaysia requires sufficient cause for dismissal without notice. Notice of termination of an employment contract must be given in writing and sent to the relevant government authorities.
While there is no statutory requirement for the length of notice periods in Malaysia, 30 days of notice is commonly given.
Severance pay varies based on how long an employee has worked at their company:
While not legally required, it is customary to pay a 13th-month salary payment at the end of each the year in Malaysia. As of 2023, employees can now apply for flexible work arrangements, and employers have 60 days to respond with either an agreement or a reason for the rejection.
★ 4%-13% - Provident Fund (age-based contribution)
★ 1.75% - Social Security
★ 0.2% - Employment Insurance
★ 1% - Human Resource Development Fund
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Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.