Fresh Graduates Should Know These 4 Malaysia Labour Law Facts

When entering the workforce for the first time, it is important to know your rights and benefits. Malaysia Labour Law is extensive but first-time jobseekers only need a working knowledge of the basics to be guided properly in their job search. Everything you need to know about employee and employer rights can be found in the Employment Act (EA) 1955.

The EA is applicable to employees earning RM2,000 or less, or workers, regardless of salary, who engage in or supervise manual labour or operate vehicles for commercial purposes. This means that most fresh graduates will likely be covered by this law. 

Here are some of the most important details about the Employment Act that you need to know before starting your first job:

You have a set number of working hours

The EA limits working hours to 48 hours a week and guarantees at least one rest day per week. Any work exceeding that will be considered overtime. The good news is that employees under the EA are entitled to overtime pay.

Overtime rates vary depending on the day. Your overtime rate is 150% of your hourly rate during regular workdays, 200% during rest days, and 300% during public holidays. Take note of these rates, especially when taking on a job that will often require extended hours.

You have paid leaves and vacation days

Speaking of public holidays, there are a total of 10, including compulsory holidays such as Malaysian Independence Day, Federal Territory Day, and Labour Day. Aside from these non-working holidays, the EA also prescribes paid leaves relative to your tenure. Those who have been working for the company for two years or less get 8 days of leave per year. For the succeeding years, up until your 5th year in the company, you will be entitled to 12 leave days per year. After the 5th year, you will be getting 16 annual leave credits.

For annual sick leaves, you will be getting 14 for the first 2 years, 18 for the 3rd-5th year, and 22 sick leaves for each year onwards.

(Read more: Your Guide to Planning Your 2021 Annual Leaves)

Your probationary period depends on your employer

It is a little-known fact that probationary periods are not required by law. All probationary periods are under company discretion. Employers can extend them if they deem an employee unfit for regular employment. However, probationary periods typically last up to three months. Employees under probationary status are also generally afforded the same rights as regular employees.

Make sure to ask the company’s probationary policy before taking a job. Read the terms of your probationary period in your employment contract carefully before agreeing to it or signing it. Employment contracts should clearly state and define the terms and conditions of your probationary status. This will help avoid any future disputes. 

You are not guaranteed bonuses (under the law)

Earning extra pay outside your monthly salary is a great perk to have. However, there are no provisions in the EA regarding employee bonuses. So never assume that every company you apply for will give out bonuses or a 13th-month pay. You need to ask about this upfront during your application period.

Many companies do give their employees 13th-month pay and other bonuses. These may vary year to year depending on the company’s profit and the discretion of top management or shareholders. When computing your potential annual salary, always remember to factor in a company’s ability to give out bonuses.

Getting your first job can be an experience filled with excitement and uncertainty. The best way to start any career is to come in fully aware of what you are entitled to under the law. Learning the basics is just the start. Knowing your rights as an employee is a continuous process that involves experience and further study.

Once you have done your research and you feel ready to embark on your career journey, be sure to create or update your JobStreet profile, so you can start searching for the #JobsThatMatter to you on our website or app. To get hired faster, don’t forget to add #WorkNow to your profile.

For more expert insights and helpful tips on growing your career, visit the Career Resources Hub.

At JobStreet, we believe in bringing you #JobsThatMatter. As a Career Partner, we are committed to helping all jobseekers find passion and purpose in every career choice. And as the number 1 Talent Partner in Asia, we connect employers with the right candidates who truly make a positive and lasting impact on the organisation. 

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