Latest Labour Laws in Malaysia: Key Updates for 2025

Staying on top of the latest labour laws is essential for both employers and employees in Malaysia. With the recent legislative changes that are now in effect, it’s important to familiarise yourself with these updates and how they influence workplace practices.

In this article, we’ll explore the new minimum wage regulations, amendments to key legislations such as the Employment Act 1955, and other important aspects of Employment Laws in Malaysia.

What Are The Latest Updates on Minimum Wage Increase in Malaysia?

Effective February 1, 2025, the national minimum wage has been raised to RM1,700 per month. According to recent reports, this wage hike applies to:

• Employers with five or more employees.
• Employers conducting professional activities under the Malaysia Standard Classification of Occupations (MASCO), irrespective of the number of employees.

Companies with fewer than five employees (and not under MASCO) can maintain the RM1,500 minimum wage until August 1, 2025, after which they must comply with the RM1,700 threshold. Additionally, there are new daily and hourly rates set to correspond with the updated monthly minimum wage figures.

Amendments to the Employment Act 1955:

The Employment Act 1955 serves as the cornerstone of private-sector Employment Laws in Malaysia. In recent amendments, its coverage was broadened to enhance protection for employees. Some key areas include:

• Working Hours: Reduced to no more than 45 hours per week, ensuring a better work-life balance.
• Overtime Pay: Employees earning under RM4,000 monthly are entitled to overtime pay at 1.5 times the hourly rate for work exceeding standard hours. Overtime on public holidays is set at 3 times the usual rate.
• Leave Entitlements: Updated regulations on annual and sick leave to protect employee welfare.

Additional Key Labour Legislations:

• Industrial Relations Act 1967:

Governs employer-employee relationships, trade unions, and industrial disputes. Effective dispute resolution mechanisms are aimed to help maintain harmonious working environments.

• Occupational Safety and Health Act 1994 (OSHA):

Focuses on creating a safe and healthy workplace by setting industry standards and imposing employer obligations.

• Statutory Deductions & Other Requirements:

Employers must continue making statutory contributions to the Employees Provident Fund (EPF), SOCSO, and the Employee Insurance System (EIS). Learn more about these critical contributions by exploring our articles on these topics here.

• Employment of Minors:

Malaysian law has imposed tight age restrictions and working hour limitations to protect minors from being exploited.

Why Do These Changes Matter?

Adhering to updated labour laws ensures smooth operations, minimizes legal risks, and promotes employee well-being. By offering fair wages and safe working conditions, companies not only meet regulatory obligations but also create a positive work culture that can improve productivity and retention in the long run.

Conclusion

The latest Labour Laws underscore Malaysia’s commitment to fair employment practices, from wage regulations to enhanced worker protections. As these changes unfold this year, staying informed and proactive will benefit both employers and employees alike.

Are you looking to streamline your compliance strategies? Explore our comprehensive HRMS tools and resources to ensure that you’re always a step ahead in managing your workforce. By integrating these new regulations effectively, you pave the way for a productive, legally compliant, and engaged workforce.