The Employment Act Malaysia 2026 governs the rights and obligations of every employer and employee in the country — and most Malaysian businesses are still not fully compliant with the sweeping amendments that took effect on 1 January 2023 under the Employment (Amendment) Act 2022. If your employment contracts, payslips, overtime calculations, flexible working policies, and termination procedures have not been updated to reflect the current Employment Act Malaysia 2026 requirements, you are exposed to Labour Department investigations, industrial court claims, and fines of up to RM50,000 per offence. This complete Employment Act Malaysia 2026 guide covers who is covered under the Act, every leave entitlement your employees are legally entitled to, the correct overtime formula, the new flexible working arrangement framework, maternity and paternity leave rules, termination and retrenchment obligations, and the penalties that the Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM) actively enforces against non-compliant employers in 2026.

RM4,000 Monthly salary threshold — Employment Act Malaysia covers all employees regardless of salary from 2023

98 days Maternity leave entitlement under Employment Act Malaysia 2026 — increased from 60 days

7 days New paternity leave entitlement — introduced by the 2023 Employment Act Malaysia amendments

RM50K Maximum fine per offence for Employment Act Malaysia 2026 violations

Who Is Covered Under the Employment Act Malaysia 2026?

The Employment Act Malaysia 2026 — formally the Employment Act 1955 (Act 265), as amended by the Employment (Amendment) Act 2022 — is the primary legislation governing employment relationships in Peninsular Malaysia and the Federal Territories. Its most important expansion under the 2022 amendments was the removal of the previous salary threshold that limited full protection to employees earning RM2,000 or below. Today, the Employment Act Malaysia 2026 applies far more broadly.

Employee Category	Coverage Under Employment Act Malaysia 2026	Key Provisions Applying
All employees earning RM4,000/month and below	Full coverage — all provisions apply	Leave entitlements, overtime pay, rest day pay, maternity/paternity leave, termination benefits, flexible working
Manual workers (regardless of salary)	Full coverage — all provisions apply	All provisions including overtime. "Manual worker" means any person employed to do manual labour including supervisors of manual work
Employees earning above RM4,000/month (non-manual)	Partial coverage — selected provisions apply	Maternity leave (98 days), paternity leave (7 days), flexible working arrangement rights, termination notice periods, sexual harassment protection, and anti-forced labour provisions. Overtime pay does NOT apply to this group under the Employment Act Malaysia 2026
Domestic servants	Excluded — covered by separate regulations	Domestic Workers regulations under the Ministry of Human Resources apply
Employees in Sabah and Sarawak	Separate legislation — Labour Ordinance (Sabah Cap. 67) and Labour Ordinance (Sarawak Cap. 76)	These states have their own employment ordinances; federal Employment Act Malaysia provisions do not apply directly
Source: Employment Act 1955 (Act 265) as amended. Employers with operations in Sabah or Sarawak must comply with state-specific ordinances in addition to understanding the federal Employment Act Malaysia 2026 framework for their Peninsular Malaysia operations.

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The RM4,000 Threshold Removed for Most Provisions: A critical change under the Employment Act Malaysia 2026 framework (effective from the 2022 amendment) was extending maternity leave, paternity leave, flexible working, anti-forced labour, and sexual harassment provisions to all employees regardless of salary. Even your highest-paid executive is entitled to 98 days maternity leave and 7 days paternity leave under the current Employment Act Malaysia 2026. Employment contracts that provide fewer days for high-earning employees are non-compliant.

Key 2023 Amendments Still in Force in 2026 — What Changed

The Employment (Amendment) Act 2022 — which took effect on 1 January 2023 — made the most significant changes to the Employment Act Malaysia 2026 framework in decades. Many Malaysian employers are still unaware of or non-compliant with several of these provisions three years on. Here is a summary of every major change still governing your employment obligations in 2026:

🤰 Maternity Leave Extended AMENDED

From 60 days → 98 days (14 weeks) Maternity leave under the Employment Act Malaysia 2026 was increased from 60 days to 98 consecutive days for all female employees regardless of salary. This applies to every confinement regardless of the number of children — the previous "5 surviving children" cap was also removed. Employers cannot require employees to work during the maternity leave period, and dismissal due to pregnancy or maternity leave is specifically prohibited and grounds for an unfair dismissal claim.

👨‍👶 Paternity Leave — New Right NEW

7 days paid paternity leave The Employment Act Malaysia 2026 now provides 7 consecutive days of paid paternity leave for male employees with at least 12 months of continuous service, for each confinement up to a maximum of 5 confinements. This right is automatic and cannot be waived by employment contract. Employers who refuse paternity leave requests from qualifying employees are in breach of the Employment Act Malaysia 2026.

🏠 Flexible Working Arrangement Right NEW

Employees may formally request flexible working arrangements Under Section 60P–60R of the Employment Act Malaysia 2026, any employee may submit a written request to their employer for a flexible working arrangement (FWA) — including changes to working hours, working days, or place of work. The employer must respond within 60 days in writing, with reasons if the request is refused. Refusing a request is permitted but refusing without written reasons within 60 days is a violation of the Employment Act Malaysia 2026.

🚫 Forced Labour Prohibition Strengthened AMENDED

Explicit prohibitions with criminal penalties The 2022 amendments to the Employment Act Malaysia 2026 introduced explicit definitions and criminal penalties for forced labour practices — including confiscation of identity documents, retention of wages, and restriction of movement. These provisions apply to all employers and are actively enforced by the Labour Department, particularly in manufacturing, agriculture, and construction sectors hiring migrant workers.

⚖️ Sexual Harassment Provisions Expanded AMENDED

Employer obligations and inquiry procedures formalised The Employment Act Malaysia 2026 now imposes a formal obligation on employers to inquire into any sexual harassment complaint made by or against employees. Employers must maintain a documented sexual harassment inquiry process. Failure to conduct an inquiry is itself an offence. This applies to all employees regardless of salary — not just those earning below RM4,000.

📝 Employment Contract Requirements Clarified AMENDED

Written contracts strengthened; oral contracts addressed The Employment Act Malaysia 2026 amendments clarified provisions around written employment contracts, ensuring key terms — position, remuneration, hours of work, and termination notice — are documented. Employment contracts must be consistent with the Act's minimum standards; any contractual provision below the statutory minimum is void and replaced by the statutory entitlement, even if the employee signed the contract.

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Older Employment Contracts Are Non-Compliant: If your company's standard employment contracts were drafted before January 2023, they almost certainly do not reflect the current Employment Act Malaysia 2026 requirements — particularly on maternity leave (still showing 60 days), paternity leave (absent entirely), flexible working procedure, and sexual harassment inquiry obligations. Every non-compliant contract is a potential Industrial Court liability. Engage a professional HR and payroll specialist in Malaysia to audit and update your employment contracts in 2026.

Leave Entitlements Under the Employment Act Malaysia 2026

Leave entitlements under the Employment Act Malaysia 2026 represent the minimum legal floor — not a recommendation. Employment contracts, company handbooks, or collective agreements may provide more generous entitlements, but none may provide less than the statutory minimums without being void on the under-compliant element. Here are all mandatory leave entitlements under the Employment Act Malaysia 2026:

Annual Leave — Employment Act Malaysia 2026

Length of Service	Annual Leave Entitlement	Notes
Less than 2 years	8 days per year	Entitlement accrues proportionally in the first year of service
2 years but less than 5 years	12 days per year	Applies from the start of the 3rd year of continuous service
5 years and above	16 days per year	Applies from the start of the 6th year; service must be with the same employer
Under the Employment Act Malaysia 2026, unused annual leave may be carried forward or encashed upon termination. Employees cannot be forced to forfeit annual leave accrued during the year. Leave must be taken at a time agreed between employer and employee.

Sick Leave — Employment Act Malaysia 2026

Length of Service	Outpatient Sick Leave	Hospitalisation Leave
Less than 2 years	14 days	60 days (inclusive of outpatient sick leave days)
2 years but less than 5 years	18 days
5 years and above	22 days
Sick leave under the Employment Act Malaysia 2026 must be supported by a medical certificate from a registered medical practitioner or a company-approved doctor. Hospitalisation leave applies when the employee is admitted as an inpatient; the 60-day total includes any outpatient sick leave already taken in the same year.

Maternity, Paternity & Other Leave — Employment Act Malaysia 2026

Leave Type	Entitlement	Eligibility & Conditions
Maternity Leave AMENDED 2023	98 consecutive days	All female employees regardless of salary. No cap on number of confinements. Employer must pay full wages during maternity leave. Cannot be dismissed due to pregnancy or maternity.
Paternity Leave NEW 2023	7 consecutive days	Male employees with minimum 12 months continuous service. Up to 5 confinements total. Full wages payable during leave. Cannot be waived by contract.
Public Holidays	11 gazetted public holidays per year (5 compulsory + 6 from the national list)	5 compulsory holidays: National Day (31 Aug), Yang di-Pertuan Agong's Birthday, Labour Day (1 May), Malaysia Day (16 Sep), and one other per state. Employees required to work on public holidays earn triple pay.
Rest Day	Minimum 1 rest day per week	Employees required to work on a rest day earn double their ordinary rate of pay (or single day wages if half-day work). The rest day must be set in the employment contract or agreed in writing.
All leave entitlements are the statutory Employment Act Malaysia 2026 minimums. Employers may provide more generous entitlements by contract or company policy; any entitlement below the statutory minimum is unenforceable. Source: Employment Act 1955 (Act 265) as amended 2022.

Overtime Rates & Working Hours — Employment Act Malaysia 2026

Overtime pay is one of the most frequently miscalculated employer obligations under the Employment Act Malaysia 2026. Incorrect overtime calculations — particularly the "Ordinary Rate of Pay" (ORP) formula — are among the most common Labour Department findings during workplace inspections. Understanding and applying the correct formula is essential for every Malaysian employer with shift workers, hourly staff, or employees regularly working beyond normal hours.

Normal Hours of Work Under Employment Act Malaysia 2026

Under Section 60A of the Employment Act Malaysia 2026, the standard working hour limits are:

Maximum 8 hours per day of work (not including rest breaks of at least 30 minutes after every 5 consecutive hours of work)
Maximum 45 hours per week across any work arrangement
Maximum 5 consecutive hours without a rest break of at least 30 minutes
Maximum overtime of 104 hours per month (including rest days and public holidays)

Overtime Pay Rates — Employment Act Malaysia 2026

1.5×

Overtime on a Working Day

ORP × 1.5 per hour worked beyond 8 hours

2×

Work on a Rest Day

ORP × 2 per hour (half-day: full day wages; full day: 2 days wages)

3×

Work on a Public Holiday

ORP × 3 per hour — also applies to compulsory holidays

How to Calculate Ordinary Rate of Pay (ORP) — Employment Act Malaysia 2026

The Ordinary Rate of Pay (ORP) is the hourly rate used as the basis for overtime calculations under the Employment Act Malaysia 2026. It is calculated differently depending on how the employee is paid:

Pay Structure	ORP Formula	Example
Monthly-paid employee	Monthly wage ÷ 26 = Daily Rate Daily Rate ÷ Normal Hours/Day = Hourly ORP	RM3,000/month ÷ 26 = RM115.38/day ÷ 8 hrs = RM14.42/hr ORP. Overtime on working day = RM14.42 × 1.5 = RM21.63/hr
Weekly-paid employee	Weekly wage ÷ 6 = Daily Rate Daily Rate ÷ Normal Hours/Day = Hourly ORP	RM750/week ÷ 6 = RM125/day ÷ 8 hrs = RM15.63/hr ORP
Daily-paid employee	Daily wage ÷ Normal Hours/Day = Hourly ORP	RM80/day ÷ 8 hrs = RM10.00/hr ORP. Rest day work = RM10 × 2 = RM20.00/hr
Hourly-paid employee	Hourly rate is the ORP	RM12.00/hr ORP. Public holiday work = RM12 × 3 = RM36.00/hr
The divisor of 26 for monthly-paid employees is mandated by the Employment Act Malaysia 2026 — not 30, 31, or 22 working days. Using the wrong divisor is the most common ORP calculation error found in Labour Department audits. This divisor applies even in months with fewer working days. Your HR payroll outsourcing provider in Malaysia should apply this formula consistently for every overtime calculation.

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Overtime Applies Only to Employees Earning RM4,000/Month and Below: Under the Employment Act Malaysia 2026, the mandatory overtime pay provisions — including the 1.5×, 2×, and 3× calculations above — apply only to employees whose monthly wages do not exceed RM4,000, and to all manual workers regardless of wage. Employees earning above RM4,000/month are not entitled to statutory overtime pay under the Employment Act Malaysia 2026 (though your company policy or employment contract may voluntarily provide it). This distinction must be reflected correctly in your payroll system to avoid both over-payment and under-payment claims.

Flexible Working Arrangements Malaysia 2026 — New Employee Rights

One of the most commercially significant changes in the current Employment Act Malaysia 2026 framework is the formal right of employees to request flexible working arrangements (FWA). Introduced by the 2022 amendments, this right applies to all employees regardless of salary, and creates specific procedural obligations for employers that most Malaysian businesses have not yet implemented.

Under Sections 60P to 60R of the Employment Act Malaysia 2026, an employee may submit a written application to their employer requesting a change to:

Their working hours — start and end times, or total weekly hours
Their working days — e.g., compressed work week (4-day week), or different days off
Their place of work — e.g., request to work from home, remote location, or split between office and home

Step	Party Responsible	Deadline	Requirement
Employee submits FWA application	Employee	Any time after commencement of employment	Must be in writing; must specify the type of FWA requested and proposed start date
Employer reviews application	Employer	Within 60 days of receiving the written request	Employer may approve, approve with modifications, or refuse — but must respond in writing within 60 days
Employer refuses — must provide written reasons	Employer	Within 60 days	Refusal without written reasons within 60 days is a violation of the Employment Act Malaysia 2026. Valid grounds for refusal include operational requirements, cost, inability to reorganise work, or negative impact on other employees
Employee's right to reapply	Employee	After 12 months from previous application	A refused employee may reapply after 12 months. There is no limit on the number of lifetime FWA applications under the Employment Act Malaysia 2026
Source: Sections 60P–60R, Employment Act 1955 (as amended 2022). Employers must document every FWA application and response. An undocumented refusal that leads to a resignation may constitute constructive dismissal under the Employment Act Malaysia 2026.

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Implement a Formal FWA Policy Now: Every Malaysian employer should have a written Flexible Working Arrangement Policy in place that describes the application process, evaluation criteria, and response procedure. Without this, HR managers handling FWA requests informally — or ignoring them — create direct compliance exposure under the Employment Act Malaysia 2026. A standardised FWA application form and a documented response workflow satisfies both the statutory requirement and protects your company from constructive dismissal claims rooted in FWA disputes.

Ensure Your Payroll & HR Practices Are Employment Act Malaysia 2026 Compliant

KC Group's HR & payroll team audits employment contracts, calculates ORP-correct overtime, manages statutory leave records, and keeps your business fully compliant with the Employment Act Malaysia 2026.

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Termination, Retrenchment & Resignation — Employer Obligations Under Employment Act Malaysia 2026

Termination of employment is the highest-risk area of Employment Act Malaysia 2026 compliance for Malaysian employers. Every wrongful dismissal, retrenchment without proper procedure, or unlawful termination creates a direct Industrial Court claim — and Malaysia's Industrial Court is active and employee-friendly in its adjudication. Here are the core employer obligations on termination under the Employment Act Malaysia 2026:

Notice Periods — Employment Act Malaysia 2026

Length of Service	Minimum Notice Period	Applies To Both
Less than 2 years	4 weeks	Both employer-initiated termination and employee-initiated resignation. Either party may pay salary in lieu of notice.
2 years but less than 5 years	6 weeks
5 years and above	8 weeks
Employment contracts may specify longer notice periods (common for senior roles) but not shorter. A contractual provision of e.g. "1 month notice" is only valid if it meets or exceeds the statutory minimum under the Employment Act Malaysia 2026 for the employee's length of service.

Termination Benefits (Retrenchment / Redundancy)

Under the Employment Act Malaysia 2026 and the Employment (Termination and Lay-Off Benefits) Regulations 1980, employees who are retrenched or have their positions made redundant are entitled to termination benefits based on their length of service — regardless of whether the retrenchment is due to economic conditions, restructuring, or technology displacement. These are the statutory minimums:

Length of Continuous Service	Termination Benefit Rate
Less than 2 years	10 days' wages per year of service (pro-rated for incomplete years)
2 years but less than 5 years	15 days' wages per year of service (pro-rated for incomplete years)
5 years and above	20 days' wages per year of service (pro-rated for incomplete years)
"Wages" for termination benefit calculation means the employee's last drawn monthly wages — not including overtime, allowances, or benefits-in-kind. Termination benefits must be paid within 7 days of the effective termination date under the Employment Act Malaysia 2026. Late payment carries penalties.

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Retrenchment Procedure — JTKSM Notification Required: Before retrenching employees, Malaysian employers must notify the Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM) via the e-PLKS portal at least 30 days before the effective retrenchment date. Failure to notify JTKSM is a separate offence under the Employment Act Malaysia 2026. In addition, the "Last In, First Out" (LIFO) principle should be followed when selecting employees for retrenchment, and employers should give preference to retaining local employees over foreign workers where competency is equivalent.

Employer Compliance Checklist — Employment Act Malaysia 2026

Malaysian employers must satisfy a comprehensive set of ongoing obligations under the Employment Act Malaysia 2026. This checklist covers the most frequently inspected areas during JTKSM Labour Department workplace inspections in 2026:

1

Written Employment Contracts for Every Employee — every employee must have a written contract specifying their position, salary, normal hours, rest day, leave entitlements, and notice period. Contracts must be consistent with the Employment Act Malaysia 2026 minimums and updated to reflect the 2022 amendments (maternity leave 98 days, paternity leave 7 days, FWA provisions).
2

Accurate Payslips Every Pay Period — Section 25A of the Employment Act Malaysia 2026 requires employers to provide a payslip at each payment of wages showing the wage period, gross wages, allowances, deductions (EPF, SOCSO, PCB), and net wages. Payslips must be in the national language or English. Payslips managed through professional payroll outsourcing in Malaysia automatically satisfy this requirement.
3

Wages Paid on the Agreed Payment Date — Not Late — under Section 19 of the Employment Act Malaysia 2026, wages must be paid within 7 days of the last day of the wage period. For monthly-paid employees, wages must be paid by the 7th of the following month. Late wage payment — even by one day — is an offence and entitles the employee to claim a wage arrears complaint with the Labour Department.
4

Correct EPF, SOCSO, and EIS Contributions — employer obligations under EPF, SOCSO, and EIS are separate from the Employment Act Malaysia 2026 but run in parallel with it. Every employee covered by the Act must be registered and contributing. Correct contribution rates must be applied using the ORP-consistent wage figures — inconsistencies between payroll records and EPF/SOCSO submissions are a common audit finding.
5

Maintain an Employee Register (Section 61) — every employer with more than 5 employees must maintain a register containing each employee's name, date of birth, IC number, date of commencement of employment, designation, rate of wages, and any other prescribed particulars. This register must be available for inspection by a Labour Inspector at any time and retained for 6 years after the employee leaves.
6

Sexual Harassment Inquiry Procedure in Place — under the 2022 amendments to the Employment Act Malaysia 2026, every employer must have a documented procedure for receiving and inquiring into sexual harassment complaints. This does not require a separate HR department — a written procedure in your employee handbook, acknowledged by all staff, satisfies the requirement.
7

FWA Response Process Documented — designate a responsible manager or HR function to receive, evaluate, and respond in writing to FWA applications within the 60-day window. Implement a standard FWA application form and a response template that documents the decision and reasons. Without this process, every informal FWA discussion is a potential Employment Act Malaysia 2026 liability.
8

Cloud Payroll System Applying Correct ORP and Leave Calculations — manual payroll calculations are the most common source of Employment Act Malaysia 2026 overtime errors. Implement a payroll system — or engage professional HR payroll outsourcing in Malaysia — that automatically applies the ÷26 ORP formula, the correct 1.5×/2×/3× multipliers, and accurate leave accrual calculations across all employee categories.

Penalties for Non-Compliance with the Employment Act Malaysia 2026

The Labour Department (JTKSM) and the Ministry of Human Resources actively enforce the Employment Act Malaysia 2026 through workplace inspections and employee complaints. The penalty regime was significantly strengthened by the 2022 amendments, with maximum fines increased across most offence categories. Employers operating without current Employment Act compliance should treat this as an urgent priority in 2026:

Offence	Maximum Fine	Section
Failure to pay wages on time or underpaying wages	RM50,000 per offence	Section 99, EA 1955
Failure to grant maternity leave or paternity leave	RM10,000 per offence	Sections 37–44, EA 1955
Dismissing an employee for pregnancy or maternity	RM10,000 + potential Industrial Court award	Section 37(4), EA 1955
Failure to provide payslips	RM10,000 per offence	Section 25A, EA 1955
Incorrect overtime calculation / failure to pay overtime	RM50,000 per offence	Section 60A, EA 1955
Failure to respond to FWA application within 60 days	RM10,000 per offence	Section 60R, EA 1955
Failure to conduct sexual harassment inquiry	RM10,000 per offence	Section 81C, EA 1955
Forced labour practices (document confiscation, wage retention)	RM100,000 and/or 2 years imprisonment	Section 90B, EA 1955
Failure to maintain employee register	RM10,000 per offence	Section 61, EA 1955
Late payment of termination benefits	RM50,000 per offence + payment of benefits owed	Employment (Termination & Lay-Off Benefits) Regs 1980
Penalties above are per-offence maximums. Repeat offences attract higher penalties. Employees may also pursue separate Industrial Court claims for wrongful dismissal, constructive dismissal, and wage arrears — awards from the Industrial Court are not capped by the penalty schedule above. JTKSM inspections can be triggered by a single employee complaint with no prior warning to the employer.

Frequently Asked Questions — Employment Act Malaysia 2026

How many days of annual leave is an employee entitled to under the Employment Act Malaysia 2026?

Under the Employment Act Malaysia 2026, annual leave entitlements for covered employees are: 8 days per year for employees with less than 2 years of service; 12 days per year for employees with 2 to less than 5 years of service; and 16 days per year for employees with 5 or more years of service. These are the statutory minimums — employment contracts may provide more, but not less. For employees earning above RM4,000/month (non-manual), the same annual leave entitlements apply under the Employment Act Malaysia 2026 as the 2022 amendments extended coverage. Leave entitlement accrues proportionally during the first year of service.

What is the maternity leave entitlement in Malaysia 2026?

Under the current Employment Act Malaysia 2026, all female employees are entitled to 98 consecutive days of paid maternity leave for each confinement. This was increased from 60 days by the Employment (Amendment) Act 2022, which took effect on 1 January 2023. The 98-day entitlement applies to all female employees regardless of salary — there is no salary cap — and regardless of the number of children (the old "5 surviving children" cap was removed). An employee cannot be dismissed due to pregnancy or for taking maternity leave, and any employment contract providing fewer than 98 days of maternity leave is void on that provision and replaced by the statutory 98-day entitlement.

Is an employer required to approve flexible working arrangement requests in Malaysia?

No — under the Employment Act Malaysia 2026, employers are not required to approve flexible working arrangement (FWA) requests. An employer may refuse a request on reasonable grounds including operational requirements, cost, or reorganisation difficulties. However, the employer must respond in writing within 60 days of receiving the written FWA application, providing written reasons if the request is refused. Failure to respond within 60 days, or refusal without written reasons, is an offence under the Employment Act Malaysia 2026 with a maximum fine of RM10,000. The right to request FWA under the Employment Act applies to all employees regardless of salary.

How is overtime calculated under the Employment Act Malaysia 2026?

Overtime under the Employment Act Malaysia 2026 is calculated using the Ordinary Rate of Pay (ORP) as the hourly base rate. For monthly-paid employees, ORP = Monthly Wage ÷ 26 (daily rate), then ÷ normal daily hours (hourly rate). The overtime multipliers are: 1.5× ORP per hour for overtime on a normal working day (i.e., work beyond 8 hours); 2× ORP per hour for work on a rest day; and 3× ORP per hour for work on a public holiday. Overtime pay provisions under the Employment Act Malaysia 2026 apply only to employees earning RM4,000/month or below, and to all manual workers regardless of wage. The maximum overtime permitted is 104 hours per month. Professional payroll outsourcing in Malaysia ensures these calculations are applied correctly for every employee every month.

Does the Employment Act Malaysia 2026 apply to employees earning above RM4,000 per month?

Yes — but with important limitations. Following the 2022 amendments, the Employment Act Malaysia 2026 now covers employees earning above RM4,000/month for a specific set of provisions: 98 days maternity leave, 7 days paternity leave, flexible working arrangement rights, sexual harassment inquiry protections, forced labour prohibitions, and termination notice period requirements. However, employees earning above RM4,000/month (non-manual workers) are not entitled to overtime pay under the Employment Act Malaysia 2026 — this is the most significant carve-out that remains. If their employment contract or company policy provides overtime, they are entitled to it contractually, but there is no statutory minimum overtime obligation for this salary group.

What happens if an employer dismisses an employee for being pregnant in Malaysia?

Dismissal of an employee due to pregnancy or for exercising her right to maternity leave is explicitly prohibited under Section 37(4) of the Employment Act Malaysia 2026. An employer who dismisses, penalises, or reduces the wages of an employee due to pregnancy commits an offence under the Act carrying a fine of up to RM10,000 per offence. In addition to the criminal penalty, the affected employee may lodge an unfair dismissal claim at the Ministry of Human Resources, which can result in the Industrial Court ordering reinstatement or back-wages compensation. Constructive dismissal — making working conditions so difficult that the pregnant employee has no reasonable option but to resign — is treated in the same way as direct dismissal under Malaysian industrial relations law.

Final Word: Employment Act Malaysia 2026 Compliance Is a Year-Round Obligation, Not a One-Time HR Task

The Employment Act Malaysia 2026 sets the minimum legal floor for every employment relationship in Peninsular Malaysia — and with the enhanced penalties introduced by the 2022 amendments now fully in force, the cost of non-compliance has escalated significantly. Missing a 60-day FWA response, paying insufficient maternity leave, applying the wrong ORP divisor across a year of overtime calculations, or failing to respond to a sexual harassment complaint in writing can each result in fines of RM10,000–RM50,000 per offence — before any Industrial Court proceedings.

For most Malaysian SMEs, the most reliable path to full Employment Act Malaysia 2026 compliance is through professional HR and payroll support — a team that stays current on legislative changes, applies the correct ORP formula every month, maintains statutory employee registers, prepares compliant payslips, and manages leave records systematically. This is exactly what KC Group's integrated HR payroll outsourcing service delivers.

Whether you need to audit your current employment contracts for 2022 amendment compliance, implement a formal FWA policy, correct historical overtime miscalculations before a Labour Department inspection, or simply ensure your monthly payroll is Employment Act Malaysia 2026 compliant from this month forward — KC Group's HR payroll team is ready to help.

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Employment Act Malaysia 2026 Leave Entitlement Malaysia 2026 Maternity Leave Malaysia 2026 Paternity Leave Malaysia 2026 Overtime Calculation Malaysia 2026 Flexible Working Malaysia 2026 Termination Benefits Malaysia Employment Act 1955 Amendment 2022 Employee Rights Malaysia 2026 Employer Obligations Malaysia 2026

Employment Act Malaysia 2026: Complete Employer & Employee Guide