Understanding salary and leave entitlements is crucial for both employers and employees in Malaysia. This article provides a clear explanation of minimum wage requirements, statutory deductions, annual leave allowances, sick leave, and other mandatory entitlements as outlined in the Employment Act 1955.
Minimum Wage Requirements
In Malaysia, the minimum wage is regulated to ensure that employees receive fair compensation for their work. As of January 2023, the minimum wage rates are RM1,500 per month for employees in Peninsular Malaysia and RM1,200 per month for those in Sabah, Sarawak, and Labuan. These rates are subject to periodic reviews by the government to align with the cost of living and economic conditions.
Statutory Deductions
Employers are required to make statutory deductions from employees' salaries for social security and other mandated contributions. Key deductions include:
1. Employees' Provident Fund (EPF):
Both employer and employee contributions are mandatory, with the standard rate being 12% from the employer and 11% from the employee.
2. Social Security Organisation (SOCSO):
Contributions to SOCSO provide social security coverage for employees in case of accidents, disabilities, or death. The contribution rates vary depending on the employee's salary.
3. Employment Insurance System (EIS):
This system provides financial assistance to employees who have lost their jobs. The contribution rate is 0.2% of the employee's monthly wage from both the employer and employee.
Annual Leave Allowances
The Employment Act 1955 stipulates that employees are entitled to a certain number of paid annual leave days based on their length of service:
Less than 2 years: 8 days per year
2 to 5 years: 12 days per year
More than 5 years: 16 days per year
Employees who have not completed 12 months of continuous service are entitled to annual leave in proportion to the number of completed months of service. Public holidays, sick leave, and maternity leave are not counted as part of the annual leave.
Sick Leave
Employees are entitled to paid sick leave after examination and certification by a registered medical practitioner. The entitlement is as follows:
Less than 2 years of service: 14 days per year
2 to 5 years of service: 18 days per year
More than 5 years of service: 22 days per year
Hospitalisation: 60 days per year, regardless of the length of service
Employees must inform their employers of their sick leave within 48 hours to be entitled to paid sick leave. Failure to do so may result in the sick leave being considered as unpaid.
Other Mandatory Entitlements
1. Public Holidays:
Employees are entitled to 11 paid public holidays per year, five of which are mandatory: National Day, the birthday of the Yang di-Pertuan Agong, the birthday of the Ruler or Governor of the state, Labour Day, and Malaysia Day. If a public holiday falls on a rest day, the following working day is a paid holiday.
2. Maternity Leave:
Female employees are entitled to at least 98 days of maternity leave for each confinement. To qualify for maternity allowance, they must have been employed for at least 90 days in the nine months preceding the confinement.
3. Paternity Leave:
Male employees are entitled to 7 days of paid paternity leave for up to five confinements, provided they have been employed for at least 12 months.
4. Rest Days:
Employees must be given one rest day per week. If they are required to work on a rest day, they are entitled to additional pay.
Conclusion
Employers must ensure compliance with these statutory requirements to create a fair and supportive work environment. Employees should be aware of their rights to make informed decisions about their employment. By understanding these entitlements, both parties can work together to foster a productive and positive workplace.
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