Leave Types 101: What Types of Paid Leave Are Malaysian Employees Entitled To?

New amendments to the Employment Act 1955 will come into effect on the 1st of January 2023. Read the full breakdown here.

Disclaimer: This article should not be considered to be legal advice, and altHR is not liable for any actions taken based on this article.‍

Whether you’re an employer or an employee, paid leave entitlement is an essential element of any employment contract. Despite the ongoing COVID-19 pandemic, benefits such as paid leave should not (and can not) be withheld from employees — although it must be noted that leave is subject to discretionary approval by employers. 

In Malaysia, the types of leave entitlements are covered by the Employment Act 1955, although this comes with a caveat. Firstly, this only covers employees working in West Malaysia. Secondly, the Act only applies to employees who earn monthly wages of RM2,000 or less, or employees who enter into contracts of service for manual labour. 

This means that the actual employment contract — rather than the Act — will govern leave entitlements for employees who earn above RM2,000 per month. However, the terms should still be similar, or improved from those provided in the Act. As such, here are the types of paid leave that most Malaysian employees are entitled to, based on the Employment Act 1955. ‍

1. Annual Leave

The Act provides that every employee shall be entitled to paid annual leave as per the following terms: 

(a) Employees of less than 2 years: 8 days for every year of service

(b) Employees of 2–5 years: 12 days for every year of service

(c) Employees of at least 5 years: 16 days for every year of service‍

Meanwhile, employees who have not completed full, continuous years of service will still be entitled to paid annual leave, although the entitlement will be prorated based on months of service. This can be calculated by dividing the annual entitlement by the 12 months, and multiplying that figure by the number of months served. 

For example, Employee A is entitled to 12 days of annual leave, but they have only been employed by Employer A for 6 months. This means that they are entitled to 6 days of annual leave at this point. 

There is a catch: employees who are absent from work “without the permission of his employer” and “without reasonable excuse” for 10 percent of the working year will forfeit their right to paid annual leave.

2. Public Holidays in Malaysia

Public holidays in Malaysia are plentiful — and employees under the Employment Act are entitled to eleven paid gazetted holidays within the calendar year. This includes the National Day, the Birthday of the Yang di-Pertuan Agong, the Birthday of the Ruler or the Yang di-Pertua Negeri, and Malaysia Day. 

However, the number of public holidays can (and usually does) exceed this figure. Under Section 8 of  the Holidays Act 1951, any other day can be appointed as a public holiday — such as days after major sporting achievements, such as Olympics triumphs. However, do note that these are discretionary to the federal and state governments’ decisions. 

So, what do employers do if public holidays fall on a weekend, or another public holiday? According to the Employment Act 1955, employees will get a replacement day off on the next business day. Remember: this only applies to employees covered under the Act. For those not covered, you’ll need to look closely at the terms of your employment contract, as well as company policy.

3. Sick Leave (Medical Leave)

‍Most employment contracts also provide for days off due to illness. There is usually a finite number of paid days you can take per calendar year, and a medical certificate (MC) is usually required. However, many companies no longer have this as a requirement — although this practice requires a modicum of trust within company culture. 

The Employment Act 1955 states that employees under the Act are entitled to: 

1. 14 days per year if employed for less than 2 years 
2. 18 days per year if employed between 2–5 years 
3. 22 days per year if employed for 5 years or more
   

In total, employees are entitled to a total number of 60 days of paid sick leave in a calendar year — this also includes MCs issued by dental surgeons, as provided by the Act. However, this figure does not include the allocation of sick leave for hospitalisation (as certified by a registered medical practitioner or officer), which stands at 60 days per year.

One final thing you should take note of: employees are required to inform (or attempt to inform) their employers of sick leave at least 48 hours in advance, according to the Employment Act 1955. For those not covered by the Act, this advance period is usually more forgiving — something close to 24 hours, or even notice on the day itself. ‍

4. Maternity Leave

The Act also provides that every female employee shall be entitled to at least 60 consecutive days of paid maternity leave, as well as a maternity allowance — which is basically your usual salary. However, there are conditions for the latter:

• The employee must have been employed by the employer for an total period of 90 days over the 9 months leading up to her confinement period; and 

• The employee must have been employed by her existing employer within the 4 months leading up to the confinement period. 
  

It’s worth noting that the Ministry of Human Resources has announced that employees in the private sector are entitled to 90 days of maternity leave now — in line with the public sector. This was announced during Budget 2020, and has taken effect since January 2021. Despite the fact that the Employment Act 1955 has yet to be amended, the government has warned that the 90-day period is mandatory, and will be enforced. ‍

Using altHR to keep track of leaves — in the “new normal”

As you can see, handling leave entitlements for employees can be a challenging process for employers and HR professionals — but it doesn’t have to be. 

Digi’s super app, altHR, can help with this. The Leaves module (one of the most popular features on the app) is a comprehensive tool that helps to keep track of your employees leave allocations, requests, and policies. 

You’ll even be able to handle the more complex aspects of leave policies, such as the different entitlements for different groups of employees based on tenure with the company, marital status, levels, carry-forward balances, replacement leave policy, and even leave reports. And of course, all of that works seamlessly with the other modules in the new normal, such as Documents, Expense and Payroll Management. 

HR professionals are often faced with daunting, often tedious tasks on a daily basis — tasks that have become even more difficult to handle in light of the ongoing COVID-19 situation. 

But help is available, if you know where to look. Let us streamline your HR processes by managing and automating day-to-day tasks, so you won’t have to worry about things like paperwork, privacy concerns, time-tracking, or onboarding challenges.

Sign up for altHR, the all-in-one digital solution that covers everything from payroll and onboarding, to staff management and providing employees with information kits. You’ve done it the old way long enough.