Malaysia Employment Guide

Malaysia is in Southeast Asia, spanning the Malay Peninsula and northern Kalimantan, with a superior location as a key Southeast Asian economic and transportation hub. It has ~33 million people from diverse groups, including Malays, Chinese and Indians. Its economic pillars cover manufacturing, electronics, oil and gas, palm oil, tourism and services, with Kuala Lumpur (the capital) as the political and commercial center. Malaysia’s labor laws are mainly regulated by the 1955 Labour Ordinance. It stipulates a 48-hour standard workweek, written contracts for employment relations, and requires employers to provide minimum wages, overtime compensation and statutory benefits. Dismissals need valid reasons and legal procedures, and employees are entitled to paid annual and sick leave.

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Currency

Malaysian Ringgit (MYR)

Capital

Kuala Lumpur

Official language

Malay (Bahasa Malaysia)

Salary Cycle

Monthly

Our Employment Guide in Malaysia

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Essential Components of an Employment Contract

An employment contract must be drafted in English, presented in written form, and signed by both parties to be legally valid. It should comprehensively cover the following key elements:

Job title and description
Duration of the contract
Primary work location
Base salary and payment schedule
Standard working hours and days
Additional benefits, if applicable
Overtime policies and compensation
Annual leave entitlements
Terms for contract termination
Sick leave and hospitalization leave
Designated rest days
Probationary period details
Notice period requirements
Job responsibilities and expectations
Statutory deductions and income tax provisions

Understanding the Probationary Period

At SailGlobal, new employees typically undergo a 90-day probationary period, which may be extended up to 180 days based on performance and mutual agreement. Since January 2022, SailGlobal's policy mandates that all employment agreements include a clearly defined probation clause.

This initial period serves as a critical evaluation phase for both the employer and the employee. It allows the company to assess the employee's fit for the role and organizational culture efficiently. Conversely, it provides the employee an opportunity to determine if the position aligns with their long-term career aspirations. For instance, in a recent case with a multinational client, SailGlobal facilitated a 120-day probation period that led to a successful permanent placement, demonstrating the flexibility and effectiveness of this approach.

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