In Malaysia, the minimum wage differs for some cities within the country.

• In Peninsular Malaysia, the minimum wage is RM1,200 per month.
• Outside of these areas in East Malaysia and Labuan, the minimum wage is RM1,100 per month.

Regardless of whether an employee is classified as EA or Non-EA, an employer in Malaysia has to fulfil 3 statutory deductions from an employee’s salary:

1. The employee’s contribution to the Employees Provident Fund (EPF)
2. The employee’s contribution to the Social Security Organisation (SOCSO)
3. Monthly income tax deduction

Also, the employer has to make payment for the employer’s contribution to the Employees Provident Fund.

Under statutory requirements, all female employees regardless of EA or Non-EA classification, are entitled to 60 consecutive days of paid maternity leave for her first 5 children as long as they fulfil both the criteria below:

• Employed by the employer for at least 90 days in total during the 9 months of pregnancy before her confinement
• Employee was employed at any time in the four months immediately before her confinement

This could still result in cases where an employer has to continue paying maternity allowance to an employee who left employment before giving birth. However, the female employee that is leaving her employment must notify about her pregnancy within 4 months from her last date of employment, as failure to do so will result in no maternity allowance.

For a period of 90 days after the female employee’s maternity leave, she also cannot be terminated as Malaysia enforces strict pregnancy discrimination laws.

There are no statutory obligations for employers to provide Paternity Leave for male employees. However, it is up to the employer’s discretion if they want to offer this benefit for their male employees

Generally, the notice for termination can will be as follow if unspecified in the employment contract:

• 4 weeks notice – has been employed for less than 2 years;
• 6 weeks notice – has been employed for 2 years or more but less than 5 years; or
• 8 weeks notice – has been employed for 5 years or more.

In Malaysia, an employer can terminate an employee by giving them notice or payment in lieu of notice as long as it is for a reasonable cause and the cause is written in the termination letter and done in good faith.

Permanent employees must be terminated with “just cause and excuse” reasons. This goes to both EA and Non-EA employees. “Just cause and excuse” reasons generally covers the scope of misconduct, poor performance or redundancy/retrenchment. As the law is protective of unfair dismissals, employers must be mindful to ensure that the termination process is procedurally fair.