The Employment Act (EA) 1955, as amended by the Employment (Amendment) Act 2022, specifies certain minimum leave entitlements Malaysian employers must grant their employees. This article will set out those mandatory requirements, as well as other non-compulsory leaves commonly accorded by employers.
This article covers:
Leave Entitlements under the EA
Since 1 January 2023, the sections of the EA relating to leave entitlements apply to all employees irrespective of wages, apart from domestic employees.
Any clauses in employment contracts which are less favourable to employees than the entitlements stipulated in the EA are automatically overridden by the EA provisions. Contractual clauses more favourable to the employee remain valid.
It should be noted that the EA applies solely to Peninsular Malaysia and the Labuan Federal Territory. Employment in Sabah and Sarawak is governed by the Sabah Labour Ordinance and Sarawak Labour Ordinance respectively.
Annual Leave
Under Section 60E of the EA, employees are entitled to paid annual leave based on their duration of employment, as shown in the table below:
| Duration of employment | Number of annual leave days for every twelve months of continuous service |
| Less than two years | 8 |
| More than two years and less than five years | 12 |
| Five years or more | 16 |
The annual leave should be taken within 12 months after the end of each 12 months’ service (though, at the employer’s discretion, any unused balance can be carried forward to the next year or paid to the employee).
If an employee has not completed 12 months of continuous service with the same employer during the year their contract of service is terminated, they are entitled to annual leave on a pro-rata basis. This is calculated according to the number of completed months of service. Fractions of a day less than half are disregarded, while fractions of a day more than half are rounded up to one full day.
For instance, if an employee has completed 6 months of service and is in their first year of employment (where the annual entitlement is 8 days of leave), they would be entitled to prorated annual leave. This is calculated as (number of months completed/twelve months) * 8, which is equal to 4 days of annual leave.
The daily rate for any unused leave paid to an employee whose contract has been terminated is based on the employee’s ordinary rate of pay (monthly wages / 26), or on any rate more favourable to the employee at the employer’s discretion.
Sick Leave
Under Section 60F of the EA, employees are entitled to paid annual leave based on their duration of employment, as shown in the table below:
| Duration of employment | Number of sick leave days per calendar year |
| Less than two years | 14 |
| More than two years and less than five years | 18 |
| More than five years | 22 |
Up to an additional 60 days per calendar year is granted if hospitalisation is required.
An employee must be certified by a registered medical practitioner or dental surgeon at the employer’s expense, as well as inform their employer within 48 hours of the commencement of the leave, to avail of sick leave.
Sick leave pay is calculated at the employee’s ordinary rate of pay for each day of sick leave. If the employee is on a monthly salary, the payment for sick leave is considered fulfilled upon receiving their monthly wages, without abatement for the days they were on sick leave.
Public Holiday
Under Section D of the EA, employees are entitled to paid leave at their ordinary rate of pay on 11 of the gazetted public holidays, 5 of which must be:
- The National Day,
- Birthday of Yang di-Pertuan Agong,
- The Birthday of the Ruler or the Yang di-Pertua Negeri or the Federal Territory Day,
- The Workers’ Day; and
- Malaysia Day.
Before the start of each calendar year, employers must conspicuously display a notice stating which remaining 6 public holidays employees are entitled to.
Additional ad hoc holidays may be declared during the year under Section 8 of the Holidays Act 1951.
If a public holiday falls on a rest day or any other public holiday, the next available workday will be declared a public holiday in substitution for that public holiday.
An employee on a monthly rate of pay shall be deemed to have received his holiday pay if he receives his monthly wages, without abatement for the public holiday.
Employees covered under the overtime provisions of the EA (eg, employees receiving wages of up to RM4,000, or manual workers) and who are required to work during a public holiday, should receive 2 days’ wages at their ordinary rate of pay, in addition to the public holiday pay they are entitled to for that day.
Maternity Leave
Under Section 37 of the EA, every female employee is entitled to maternity leave of 98 consecutive days in respect of each confinement. Confinement is defined as childbirth resulting after at least 22 weeks of pregnancy in the issue of a child or children, whether alive or deceased.
The maternity leave should start no earlier than 30 days before the delivery and no later than the day following her confinement.
To be eligible to receive maternity allowance during their maternity leave, a female employee must:
- have been employed by the employer for at least 90 days in the 9 months preceding confinement; and
- have been employed by the employer at any time during the 4 months immediately before confinement; and
- have fewer than 5 surviving children at the time of her confinement.
Maternity allowance is calculated at the employee’s ordinary rate of pay. If the employee is on a monthly salary, the employee is deemed to have received her maternity allowance upon receiving her monthly wages, without abatement for the days she was on maternity leave.
A female employee is required to inform her employer of her confinement and start date of maternity leave at least 60 days in advance, failing which payment of her maternity allowance may be suspended.
Female employees who wish to return to work during their maternity leave may do so with their employer’s consent, provided a registered medical practitioner certified them fit for work.
When eligible for maternity allowance from multiple employers, a female employee is entitled to a total amount equal to the allowance from a single employer only. If she receives more than this from various employers, one employer may recover the excess from the others as a civil debt.
It is illegal to terminate the employment of a female employee during her pregnancy, maternity leave, or if she is suffering from an illness resulting from her pregnancy. Termination is only possible under specific conditions, such as:
- wilful breach of a contractual term by the employee;
- misconduct by the employee; or
- closure of the employer’s business.
Paternity Leave
Under Section 60FA of the EA, a married male employee is entitled to paid paternity leave at his ordinary rate of pay for 7 consecutive days for each childbirth.
Eligibility for paternity leave requires that:
- he has been employed by the employer for at least twelve months immediately preceding the start of the paternity leave; and
- he has notified his employer about the pregnancy of his spouse at least thirty days from the expected confinement, or as soon as possible after the birth.
The entitlement is limited to a maximum of five confinements irrespective of the number of spouses.
Malaysia Elective Leaves
Certain employers may offer common optional leaves which are not mandatory under the EA. Those leaves may be included in the employee’s contract/employer’s manual or granted on a discretionary basis.
Unpaid Leave
Unpaid leave refers to a period when employees take absences from work without pay at the employer’s discretion, normally if they have already used all their available annual leave (or sick leave if applicable) or need to take time off for an extended period for any reason like studying, travelling or to care for a child after the employee’s maternity or paternity leave has been fully utilised.
The EA provides that the method for calculation of wages for an incomplete month’s work should apply in cases where the employee takes unpaid leave, whereby their salary for that month should be calculated as Monthly wages * number of days eligible to be paid in the wage period / calendar days in the wage period.
Emergency Leave
The EA does not provide guidelines for procedures for annual leave applications, but employers will typically require for adequate notice to be given by the employee for the annual leave to be approved. However, employers may also allow for a certain number of emergency leave days whereby employees can take annual or unpaid leave without the normal notice to attend to urgent personal matters like a sick child.
Compassionate Leave
Many businesses are incorporating compassionate or bereavement leave into their contracts of service for a specified number of days based on the employee’s relation to the deceased. Those leaves are granted to employees for attending to funeral arrangements and grieving the loss of their family member.
Hajj Leave
Certain employers provide paid or unpaid leave (typically for a maximum of 30 to 40 days) for Muslim employees to perform the Hajj pilgrimage. That leave is normally available once in their lifetime and subject to a certain minimum number of years of employment for eligibility purposes.
Replacement Leave
Replacement leaves are leaves that are provided to employees who work on rest days or public holidays rather than encashment of overtime where allowed under the EA (eg, for optional public holidays or for employees not covered under the overtime provisions of the EA).
Important Cautionary Note
When making this article we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you to seek advice from qualified professionals before acting on any information provided in this article. We do not accept any liability for any damages or risks incurred for the use of this article.
