Malaysia flag Malaysia: Operating a Business in Malaysia

Work conditions in Malaysia

The Active Population in Figures

201820192020
Labour Force 15,523,12615,780,71615,904,215

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 68.00%68.54%68.64%
Men activity rate 80.34%80.85%80.94%
Women activity rate 54.81%55.39%55.49%

Source: International Labour Organization, ILOSTAT database

 
For Further Information About the Labour Market
International Labour Organisation

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Working Conditions

Legal Weekly Duration
48 hours a week.
Retirement Age
There is no legal age for retirement in the private sector even if the EPF (Employment Provident Fund) considers people are eligible from 55 for men and 50 for women.
Working Contracts
Called "Contract of Service" or "Contract of Employment", the contract is deemed to exist as soon as the employee starts to work. There are fixed-term contracts and open-ended contracts.
Labour Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labour

Minimum Wage
According to the government data, the minimum wage was MYR 1,500 per month in 2022.
Average Wage
Average montly salary for employees: MYR 2,933; median montly salary: MYR 2,062 (source: Department of Statistics Malaysia, 2020).
Social Contributions
Social Security Contributions Paid By Employers: Employees’ Provident Fund (EPF) :

  • below 60 years of age: 12% for income up to MYR 5,000, 13% for income equal or above MYR 5,000
  • age 60 and above: 4%

Employment Injury Insurance Scheme (EIIS) and Invalidity Pension Scheme (IPS): based on the employee’s monthly wages, up to a maximum of MYR 69.05 for the employer.

Employment Insurance System (EIS) : 0.2% (capped at MYR 4,000 per month, and up to a maximum of MYR 7.90).
Social Security Contributions Paid By Employees: Employees’ Provident Fund (EPF) :11% or 5.5% (depending on the age)

Employment Injury Insurance Scheme (EIIS) and Invalidity Pension Scheme (IPS): based on the employee’s monthly wages, up to a maximum of MYR 19.75 for the employee.

Employment Insurance System (EIS) : 0.2% (capped at MYR 4,000 per month, and up to a maximum of MYR 7.90).

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Social Partners

Employer Associations
MEF - Malaysian Employers Federation
MICCI - Malaysian International Chamber of Commerce and Industry
SMI - SME Association of Malaysia
Social Dialogue and Involvement of Social Partners
There are two national organisations: the Malaysian Trade Union Corporation (MTUC) and the Congress of Unions of Employees in the Public and Civil Service (CUEPACS).
Labour Unions
Unionisation Rate
9.5% of workers are unionized.
Labour Regulation Bodies
Ministry of Human Resources

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Latest Update: February 2024

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