Workplaces Need Clear Leave Policies
Employers in Malaysia are mandated by law to allocate a set number of days for certain types of leave. Of course, they are free to offer more than the minimum threshold, with market forces and goodwill being deciding factors.
Companies don’t want to be taken advantage of, but definitely don’t want to be seen as exploitative.
In this post, we’ll provide an overview of the various mandatory and optional types of leave in Malaysia. The goal: for employers and employees to know what leave is non-negotiable and what is up to the boss’ discretion.
With this, not only can they ensure workplace policies are legally compliant, but we hope the list of optional leaves inspires them with ways to improve working conditions at the company.
The Employment Act 1955
We’d like to start by citing our source: The Employment Act of 1955.
When it comes to leave policies (and most workplace policies for that matter), think of the Employment Act 1955 as your ultimate authority. The act lays out the statutory rights of employees and terms of employment, including holidays, termination, salaries, and of course, leave policies.
Now let’s look at non-negotiable types of leave in Malaysia.
Mandatory Types of Leave
The mandatory types of leave listed below can be found in the act, and employers must obey them or expose the company to legal action. Give the act a read – but finish this guide first!
1. Paid annual leave
Paid annual leave is simply a way for employees to take a break and unwind while still receiving their monthly salary. Bosses may not like the sound of that, but the fact is it avoids burnout and slumps in productivity.
Legal entitlement to paid annual leave In Malaysia is as follows:
- 8 days annually if employed between 1 – 2 years
- 12 days annually if employed between 2 – 5 years
- 16 days annually if employed for more than 5 years
If an employee has worked for less than 12 months, their annual leave will be proportional to the number of months in employment. For example, if Abu has been a cashier at a supermarket for six months, he is entitled to 4 days of paid annual leave.
Some additional notes:
- It’s separate from rest days, holidays, and other types of leave.
- If an employee is eligible to claim sick or maternity leave while on annual leave, their annual leave is considered unclaimed.
- If an employee misses work for more than 10% of their working days in a year without cause, they forfeit their right to annual leave (though in a way, they’ve already taken it).
- There is no legal obligation to carry unused annual leave forward.
- There is no legally mandated notice period for annual leave – it’s up to the employer to set guidelines.
2. Paid sick leave
On account of pesky bacteria and whatnot, people tend to get sick. When your head feels like a kettle of boiling water and your nose leaks radioactive waste, spreadsheets are the last thing on your mind. We’re not showing a photo – too gross even for us.
That’s when you go to the doctor and claim paid sick leave.
Legal entitlement to paid sick leave (without hospitalisation) in Malaysi is as follows:
- 14 days annually if employed for 1 – 2 years
- 18 days annually if employed for 2 – 5 years
- 22 days annually if employed for more than 5 years
Some additional notes:
- Employees must get certified by a registered medical practitioner or dental surgeon (covered by the Dental Act 1971).
- Employees must at least make an honest attempt to inform employers of their situation within 48 hours of needing to take sick leave.
- Failing the above, the employee may be considered absent from work without just cause.
3. Hospitalisation leave
This is an extension of sick leave, but we think it’s significant enough to merit its own section.
Where hospitalisation is necessary, add 60 days to each of the paid sick leave categories above, which means:
74 days annually if employed for 1 – 2 years
78 days annually if employed for 2 – 5 years
82 days annually if employed for more than 5 years
4. Maternity leave
From time to time, your female employees will take Human Resources a little too literally and produce a tiny human being of their own. Woohoo – new future unpaid interns!
By law, they will be entitled to paid maternity leave if they meet the following two conditions:
- they have worked for a total of at least 90 days in the nine months before childbirth, and
- they have been employed within the four months before childbirth.
In Malaysia, the legal entitlement to maternity leave is 98 days.
Some additional notes:
- It cannot start earlier than 30 days before the expected date of childbirth and cannot start later than the day after giving birth
- If an employee chooses to begin maternity leave earlier than 30 days before her due date, those extra days won’t be counted as part of her official maternity leave.
- A medical professional can decide that an employee should start her maternity leave within 14 days before her due date (this one is for the workaholics out there).
You may find versions of the Employment Act that mandate 60 days of maternity leave; those are outdated after an amendment was passed in 2022. That same amendment is also the reason for the next entry.
5. Paternity leave
Thanks to the 2022 amendment to the Employment Act, fathers are entitled to 7 consecutive days of paid paternity leave, provided they are legally married to the mother of the child.
6. Public holidays
Every employee in Malaysia is entitled to eleven gazetted public holidays, with five specific holidays:
- National Day,
- Birthday of the Yang di-Pertuan Agong
- Birthday of the Ruler of the State OR Federal Territory Day
- Workers’ Day, and
- Malaysia Day
The remaining six days can fall on any public holidays that year that are included in the Holidays Act 1951.
Some additional notes:
- If a public holiday falls on a rest day (such as a Sunday) or another public holiday, the day immediately after will be turned into a paid holiday as a substitute.
- If an employee is on sick or annual leave during a public holiday, they are owed a replacement day.
- If an employee is absent from work on the day immediately before or after a public holiday with no just cause, they forfeit the right to the paid holiday.
Alright, that wraps up the six mandatory types of leave under the Employment Act.
Now let’s take a quick look at other common types of leave.
Non-Mandatory Types of Leave
Employers don’t have to offer these but look down the list and you’ll understand why many companies today go above and beyond.
To those that don’t, we hope you have a pretty good reason!
1. Unpaid leave
This is a period of time when an employee takes time off from work but does not receive regular pay or salary. Usually, it is because they have exhausted their annual paid leave but are still not ready to return to work.
2. Emergency leave
This type of leave allows employees to take time off from work without prior notice due to an urgent and unforeseen situation, such as a family emergency or personal crisis. The classic case would be when an employee’s car suddenly breaks down, followed closely by their mental state.
3. Compassionate leave
Compassionate leave covers significant life events such as the loss of a beloved pet or the diagnosis of a terminal illness in the family. Logically, the employee would not be able to focus at work anyway, and it would be better to let them focus on processing their grief.
4. Marriage leave
Marriage leave is a special type of paid time off given to employees to celebrate their wedding day. In some cultures, weddings can take a tremendous amount of planning and ceremonies can span weeks, so some time off could be considered.
Dealing with a mother-in-law should be considered its own job, after all.
5. Disaster leave
If your employee’s house gets flooded, are you really going to ask them to come to office by motorboat?
The above question doesn’t apply to motorboat dealerships.
6. Study / examination leave
This allows employees to take time off from work to attend classes, lectures, or prepare for exams related to their field of study.
7. Birthday leave
It’s not technically their birthday, but hey, it’s a big deal for some people and allows employees to rest, spend time with family and friends, and feel noticed and appreciated by the company.
Plus, it saves you the trouble of singing the song at the office!
8. Childcare leave
Childcare leave enables employees to take time off work to care for their children. This can be especially useful for new fathers who only have seven days of legal paid paternity leave.
It could be worse: imagine them bringing their child to work.
9. Haji leave
This allows Muslim employees to take time off from work to participate in the Hajj pilgrimage, which is an important religious duty for Muslims. Considering Malaysia is a majority Muslim country, this can be an attractive proposition.
Let MISHU craft perfect policies for you
While understanding legal requirements is important, the real work happens when they are applied to workplace policies in such a way as to balance employee welfare and company performance.
Above all else, systems and rules allow groups of people to function as a cohesive unit, companies being no exception. Our HR consultants are ready to help you create and implement workplace policies backed by years of experience and inside out knowledge of the law, ensuring deadlines are met, workloads are distributed evenly, and decisions made without bias.