Employment Act 1955 Explained: Rights Every Malaysian Fresh Grad Should Know
By SuperJobs Team
Quick Answer: The Employment Act 1955 is Malaysia's core labour law, and since the 2022 amendments (effective 1 January 2023) it covers all employees in Peninsular Malaysia and Labuan — though wage-related protections like overtime apply mainly to those earning RM4,000/month or less. It guarantees a 45-hour work week, paid annual and sick leave, 98 days of maternity leave, 7 days of paternity leave, and minimum notice periods for termination.
SuperJobs Insight: Most Malaysian fresh graduates start on RM2,500–RM4,500 a month — which means the majority fall squarely inside the Employment Act's full wage protections, including overtime pay. Before you accept an offer, know what the law already guarantees you. Check salary benchmarks →
1. What Is the Employment Act 1955 and Who It Covers
The Employment Act 1955 (Akta Kerja 1955) sets minimum employment standards in Peninsular Malaysia and Labuan. Sabah and Sarawak have their own Labour Ordinances with broadly similar protections.
Since the 2022 amendments took effect on 1 January 2023, the Act covers all employees regardless of salary. However, certain wage-related sections — overtime pay, rest day pay, termination and lay-off benefits — apply only to employees earning RM4,000/month or less (plus manual workers at any wage).
Your contract can offer more than the Act, but never less — any clause below the statutory minimum is void.
2. Working Hours, Overtime and Rest Days
Under Section 60A, your maximum normal working hours are:
- 45 hours per week (reduced from 48 in the 2022 amendments)
- No more than 8 hours a day under a normal arrangement
- A break of at least 30 minutes after 5 consecutive hours of work
Overtime rules (for those within the RM4,000 threshold):
| Situation | Minimum Pay Rate |
|---|---|
| Overtime on a normal working day | 1.5x hourly rate |
| Work on a rest day | Up to 2x daily rate |
| Work on a public holiday | 3x daily rate |
Overtime is capped at 104 hours per month. Under Section 60E-adjacent provisions and Section 59, you are entitled to one whole rest day per week. If your employer routinely makes you work Saturdays and Sundays without a replacement rest day, that is a violation — not "company culture".
3. Leave Entitlements Under the Act
Your paid leave grows with your years of service:
| Leave Type | Under 2 years | 2–5 years | Over 5 years |
|---|---|---|---|
| Annual leave | 8 days | 12 days | 16 days |
| Sick leave (no hospitalisation) | 14 days | 18 days | 22 days |
| Hospitalisation leave | 60 days total per year (inclusive of sick leave) |
Two headline protections from the 2022 amendments:
- Maternity leave: 98 days paid, up from 60 days.
- Paternity leave: 7 days paid, for married fathers employed at least 12 months who notify the employer at least 30 days before the expected birth (up to 5 births).
You are also entitled to 11 paid public holidays per year, 5 of which are compulsory (National Day, the Agong's birthday, the State Ruler's/Governor's birthday or Federal Territory Day, Labour Day and Malaysia Day).
4. Salary Payment Rules and Deductions
Section 19 requires wages to be paid no later than 7 days after the end of the wage period. Chronic late payment is a breach of the Act, not a minor inconvenience.
Section 24 tightly limits deductions. Lawful ones include EPF (11% employee share), SOCSO, EIS and PCB tax, recovery of recent salary overpayments, and deductions you request in writing (some needing Director General approval). Total deductions generally cannot exceed 50% of monthly wages.
"Fines" for lateness, breakages or lost clients are not automatically lawful deductions. And as of 2026, the minimum wage is RM1,700/month — no employer can pay below this.
5. Notice Periods and Termination
If your contract is silent on notice, Section 12 sets the statutory minimums:
- 4 weeks' notice — employed less than 2 years
- 6 weeks' notice — 2 to 5 years
- 8 weeks' notice — 5 years or more
The same notice applies both ways: your employer must give you the same notice they demand from you. Either side can pay salary in lieu of notice instead of serving it (Section 13). Termination without notice is only lawful in limited cases, such as proven serious misconduct after due inquiry. See our full guide on notice periods and resignation for templates and timelines.
6. Flexible Work Arrangement Requests (2023 update)
The new Section 60P gives every employee the right to formally request a flexible working arrangement — changes to your hours, days, or place of work (including remote work).
How it works:
- Submit your request in writing to your employer.
- The employer must respond in writing within 60 days.
- If refused, the employer must state the grounds for refusal.
The employer can still say no — but they must engage with the request properly. For fresh grads juggling part-time study or long commutes, this is a genuinely useful and underused right.
7. Common Employer Violations to Watch For
Watch for these red flags, all of which appear regularly in Malaysian workplaces:
- Unpaid overtime disguised as "commitment" or "OT is part of the salary" for employees within the RM4,000 threshold
- Salary paid late or in irregular instalments
- No EPF/SOCSO contributions — check your i-Akaun and PERKESO records within your first two months
- Leave "forfeited" without payment when the Act requires unused annual leave to be paid out on termination
- Illegal deductions — fines, "uniform costs", or deposit schemes taken from your salary
- 7-day work weeks with no rest day
If two or more of these are happening, document everything — payslips, punch-card records, chat messages — before you act.
8. Where to Complain: JTKSM and Labour Court
The Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM) — the Peninsular Malaysia Labour Department under KESUMA — enforces the Employment Act.
Your options:
- File a complaint online via the Working for Workers (WFW) app or at your nearest JTKSM office. It's free.
- Labour Court (Mahkamah Buruh): For claims on unpaid wages, overtime, and statutory benefits under Section 69. No lawyer needed; the process is designed for ordinary employees.
- Industrial Relations Department: For unfair dismissal claims under the Industrial Relations Act 1967 — a separate track with a strict 60-day deadline.
Complaining to JTKSM does not require you to resign first, and retaliating against an employee for filing a complaint is itself an offence.
9. Frequently Asked Questions
Does the Employment Act 1955 cover employees earning above RM4,000?
Yes — since 1 January 2023 the Act covers all employees in Peninsular Malaysia and Labuan regardless of salary. However, specific wage-related sections such as overtime pay, rest day pay and termination benefits apply only to those earning RM4,000/month or less, or to manual workers at any wage level.
What is the maximum working hours under akta kerja 1955?
The maximum is 45 hours per week, generally not more than 8 hours a day, with at least a 30-minute break after 5 consecutive hours. Anything beyond that is overtime, payable at a minimum of 1.5 times your hourly rate for eligible employees.
How many days of annual leave am I entitled to as a fresh graduate in Malaysia?
If you have worked less than 2 years with your employer, the statutory minimum is 8 days of paid annual leave per year, rising to 12 days after 2 years and 16 days after 5 years. Many companies offer 12–14 days even for new hires, but they can never offer less than the Act.
Is my internship covered by the Employment Act?
If you work under a contract of service (fixed hours, supervised work, paid a wage), you are generally an employee and protected by the Act even as an intern. Genuine academic attachments arranged purely for course credit may fall outside it, so check whether your internship agreement is a contract of service.
Can my employer deduct my salary for mistakes at work?
Not automatically. Section 24 only permits specific deductions — EPF, SOCSO, EIS, tax, and certain consented or approved deductions. Docking pay as punishment for mistakes, lateness or losses generally requires the Director General of Labour's approval and is a common illegal practice worth reporting to JTKSM.
Take the Next Step
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- Read more career guides → — Contracts, leave, resignation and more
?Frequently Asked Questions
Does the Employment Act 1955 cover employees earning above RM4,000?
Yes — since 1 January 2023 the Act covers all employees in Peninsular Malaysia and Labuan regardless of salary. However, specific wage-related sections such as overtime pay, rest day pay and termination benefits apply only to those earning RM4,000/month or less, or to manual workers at any wage level.
What is the maximum working hours under akta kerja 1955?
The maximum is 45 hours per week, generally not more than 8 hours a day, with at least a 30-minute break after 5 consecutive hours. Anything beyond that is overtime, payable at a minimum of 1.5 times your hourly rate for eligible employees.
How many days of annual leave am I entitled to as a fresh graduate in Malaysia?
If you have worked less than 2 years with your employer, the statutory minimum is 8 days of paid annual leave per year, rising to 12 days after 2 years and 16 days after 5 years. Many companies offer 12–14 days even for new hires, but they can never offer less than the Act.
Is my internship covered by the Employment Act?
If you work under a contract of service (fixed hours, supervised work, paid a wage), you are generally an employee and protected by the Act even as an intern. Genuine academic attachments arranged purely for course credit may fall outside it, so check whether your internship agreement is a contract of service.
Can my employer deduct my salary for mistakes at work?
Not automatically. Section 24 only permits specific deductions — EPF, SOCSO, EIS, tax, and certain consented or approved deductions. Docking pay as punishment for mistakes, lateness or losses generally requires the Director General of Labour's approval and is a common illegal practice worth reporting to JTKSM.