Understanding employee classification and types of employment
Whether you're a first-time applicant or a seasoned member of the Malaysian workforce, understanding the different types of work available can help you in your working life. There are various types of employment, which refer to the different categories of staff that an organisation employs. These classifications can determine things like workers' rights and benefits.
This article can help you learn about what are the different types of employment and employment categories so you can make an informed decision. We'll be covering the following topics:
- Types of employment
- Exempt vs. non-exempt employees
- How does employment classification affect job expectations?
- How to know your employment type
- Tips for changing employment classifications
- Conclusion
- FAQs
Types of employment
Most workplaces in Malaysia have their own types of employment categories or classifications. The seven most common are: full time, part time, project based, seasonal, fixed term, casual, and probationary.
Full-time employment
In Malaysia, full-time employees typically work 40 hours a week, from 9 a.m. to 5 p.m. from Monday to Friday. Some may work fewer hours based on their specific contract. This is also sometimes called regular or permanent employment. These employees receive a salary that doesn't change, regardless of their work hours.
Regular employees have access to company benefits, such as health insurance, life insurance, paid time off, and sick leave. Some companies also offer benefits like retirement plans.
Casual employment
Casual employees only receive work when their employers need them. There's no expectation that there'll be more work in the future. During periods when you're not working for the employer, there's no obligation from either party. The company may only contact you when there's work available.
Project-based employment
Project-based employment is temporary and attached to the completion of a specific project. This is sometimes referred to as contract employment, as you complete work according to a contract. It often has a fixed start and end date.
There are usually clear tasks that you should complete within an agreed timeframe. The project may only need you for a short time, and there's no assurance that there'll be more work once it's complete.
Seasonal employment
This is another employment category that doesn't offer permanent work. Employers often hire seasonal employees during peak periods throughout the year. Companies may keep these employees as regular seasonal employees. They might give them fewer hours during the off-season and more hours during the peak season.
Seasonal employees assist with the greater demand for goods or services. For example, retailers may hire additional workers in malls and stores to support increased sales during peak seasons, such as Hari Raya Aidilfitri, Chinese New Year, Deepavali, and Christmas.
Fixed-term employment
Fixed-term contracts have a specified start and end date. As a fixed-term employee, you may work anywhere from three months to two years with a company, depending on staffing needs. This is similar to project-based employment but has a fixed term rather than being project-based. Fixed-term employees may be continuously rehired for the same kind of work from the same employer.
Probationary employment
In probationary employment, you may work on a trial period for a certain duration of time. This helps your employer determine if you're the right fit for the role. In Malaysia, it's standard practice for companies to require new employees to undergo probation. This usually lasts for three to six months. Probationers have the same rights as confirmed or permanent employees, so they can't be terminated without just cause.
Other employment types
There are also other types of employment, such as part-time employment, self-employment, freelance, and internships. Self-employment refers to people who work for themselves. They may own and operate their own business instead of working for an employer.
Freelance work is a type of self-employment where people are hired for short-term contracts and invoice clients for rendered services. Internships are temporary, often unpaid work opportunities for those who want to gain some entry-level exposure to a particular industry or field.
Exempt vs. non-exempt employees
The terms exempt and non-exempt employment may appear on job listings alongside other types of employment. They determine the wage and labour policies applicable to your role or position. As an exempt employee, or salaried worker, certain salary and compensation laws may not apply to you. You may earn a fixed salary rather than an hourly wage, and you won't be eligible for overtime pay, even if you work more than 40 hours per week.
In contrast, non-exempt employees earn at least minimum wage and can work for a fixed number of hours – usually 40 a week. Malaysia's employment law sets these rules and regulations. If you exceed 40 hours as a non-exempt employee, you can receive overtime pay and other benefits, as your wage is hourly rather than a paid salary. Non-exempt employees may have more restrictions, such as daily timekeeping or clocking in and out, so that they can receive accurate pay.
How does employment classification affect job expectations?
The type of employment can significantly impact job expectations for both employers and employees. This is because different categories follow separate guidelines and protocols that comply with the employment law in Malaysia. Here are some examples:
Workers' rights and benefits
Your employment status determines the rights, benefits, and protection your employer gives you. This includes leave entitlements, EPF contributions, pension, and redundancy payments.
Tax obligations
Tax requirements vary based on employment status. This influences your salary's taxable percentage, benefits, and exemptions. For example, employers must deduct taxes from an employee's salary, but casual staff are responsible for paying their taxes.
Job security
Employment status often indicates your job security and stability. Permanent employees usually have more employment security than temporary staff or independent contractors.
Protected rights
The legal rights and obligations of employers and employees depend on employment status. You must adhere to these legal guidelines to receive full benefits and compensation for your work.
How to know your employment type
You can find information on employment types in various places. It's usually in the job description, along with other relevant details. These details can specify if the role is full time, part time, temporary, permanent, exempt, or non-exempt. On platforms such as Jobstreet Malaysia, there's a filter option that allows you to sort job openings according to the types of employment you prefer.
If this information isn't available, review the company's official website and look for its policies on employment types. If you still can't find the information you need, try reaching out to the company's HR department. Some job descriptions provide HR contact information, but you may also be able to find these details on the company website.
Tips for changing employment classifications
Discussions regarding employment classifications can happen at any time in your career. For example, you may be applying for a job or exploring other opportunities in a company you've been with for a long time.
When applying for a position and you're unsure about the offered employment type, speak to the HR department. You can also ask questions during your interview to learn more about their job classifications. Some sample phrases you may use include:
- "Can you provide more information about the employment type for this role? Is it a permanent full-time position?"
- "I would appreciate more information about the employment terms associated with this role. Is it a permanent or temporary position?"
If you've been in the same employment type for a while and are looking for a change, reach out to your HR department. This is a great first step when exploring your options.
Start by asking HR about company policy. Given your role and scope of work, find out whether they'll consider changes to your current job. Once you know more, present a case to your direct manager. For example, if you want to change from a full-time to a part-time position, you can provide reasons and solutions.
Ultimately, the decision is your manager's, so prepare yourself for any outcome. You may want to consider presenting hybrid options between two employment types or offer to make changes on a trial basis. The key is to be open to your manager's ideas or alternative suggestions.
Conclusion
For Malaysian employees and job seekers, it's essential to have a clear understanding of the different types of employment and work classifications. It will help you effectively navigate any workplace. As an employee, you have the power to make wise and well-thought-out career choices. You should understand your rights and benefits, regardless of whether you work full time, part time, or temporarily.
FAQ
- What are the seven types of employment?
The seven types of employment are full time, part time, project-based, seasonal, fixed term, casual, and probationary. - What is the importance of accurate employee classification?
Accurate employee classification provides you with clear expectations and duties. It also helps you receive fair compensation for the work you do. The right classification ensures that you can exercise and benefit from your workers' rights. - How does employee classification impact employee benefits and rights?
Your employee type determines your entitlement to specific rights and protections. This can include minimum wage, overtime pay, worker's compensation, and healthcare benefits. It also ensures that employers treat all staff fairly and that they share the work appropriately with each employment type. - What are contingent workers?
A contingent worker is someone who works for an organisation but isn't an employee. You may provide these services through a temporary employment contract or on an as-needed basis. Examples include independent contractors, freelancers, consultants, or temporary employees. A company may use a staffing agency or other third party to employ or assign staff.