What You Need to Know About Employee Benefits in Malaysia

What are employee benefits?

Employee benefits are non-wage compensation given to employees in addition to their regular salary. It includes health, dental, vision, life and more.

Employee benefits under Employment Act 1955

Employment Act 1955 included a list of guidelines that employers must follow to provide their employees with fundamental rights and care. Though companies have to follow the minimum requirements in the Employment Act 1955, they are encouraged to create company policies that exceed these requirements. 

Sick leave is one of the employee benefits.

Types of employee benefits under the Employment Act 1955

1. Annual leave. Employees are entitled to paid annual leave of:

• 8 days for every 12 months if they have been employed for less than 2 years.
• 12 days for every 12 months if they have been employed for more than 2 years, but less than 5 years.
• 16 days for every 12 months if they have been employed for 5 years or more.

2. Public holidays. Employees are entitled to paid holidays on the following days:

-> 11 of the gazetted public holidays, 5 of them are:

• National Day
• The birthday of the Yang di-Pertuan Agong
• The Birthday of the Ruler or the Yang di-Pertua Negeri (based on the state the employee works in)
• Malaysia Day
• Workers' Day

-> On any day appointed as a public holiday under Section 8 of the Holidays Act 1951 which applies to any other day that can be observed as a public holiday as the leader of the state sees appropriate after consultation with the State Authority.

3. Maternity leave. Employees are allowed to maternity leave for a period of minimum 60 consecutive days if:

• They have been employed for less than or amounting to 90 days during the 9 months immediately before their confinement; and
• They have been employed at any time in the 4 months immediately before their confinement.
• They are also entitled to maternity allowance, which is the employee's regular monthly salary.

In the Malaysian Budget 2020, the government proposed the 90 days of maternity leave for private-sector employees and the new ruling will come in effect on 1st January 2021.

4. Sick leave and hospitalisation leave. An employee is entitled to sick leave days that are approved by a registered medical practitioner:

• 14 days every year if they have been employed for less than two years.
• 18 days every year if they have been employed for two years or more but less than five years.
• 22 days every year if they have been employed for five years or more.

But, if the employees require hospitalisation, a total number of 60 days will be provided for each employee. It includes the paid sick leave days too. Employees are entitled to their regular pay rate for each day of their sick leave, including hospitalisation.

5. Lay-off benefits. These benefits must not be less than:

• 10 days' wages for each year of employment if the employee has been employed for less than 2 years.
• 15 days' wages for each year of employment if the employee has been employed for 2 years or more but less than 5 years.
• 20 days' wages for each year of employment if the employee has been employed for 5 years or more.

Employers are required to pay the lay-off benefits to their employees no later than 7 days after the relevant date.

Starting on 1st January 2021, the maternity leave will be increased from 60 days to 90 days.

Types of employee benefits that are optional

1. Insurance / Medical Coverage. Many employers in Malaysia offer medical and insurance coverage as benefits. For example:

• Medical insurance for outpatient & inpatient 
• Vision/optical coverage
• Dental coverage
• Personal accident insurance coverage

2. Allowances. Allowances are additional payouts due to specific reasons, on top of the employee's regular salary. For example: 

• Internet allowance.
• Travel allowance.
• Parking allowance.

3. Professional Training/Certification. Some employers offer professional training/certification for employees. The professional training or certification mainly focuses on strengthening the employee's skills so they can be more productive.

4. Remote working. The employer trusts the employees to be able to work outside the office and provided them with the flexibility to work remotely or from home. 

Employee Benefits for Expatriates

Here are the benefits that are usually offered to expatriates in Malaysia:

1. Relocation assistance. A type of financial compensation for the expatriate to relocate to Malaysia. 

2. Travel incentives. The employer will bear the cost for the expatriate's flights, for example, flight tickets to go home.

3. Education assistance. Some employers also offer financial aid to expatriates with children who are attending international schools. 

4. SOCSO's Employment Injury Scheme coverage. Effective 1st January 2019, employers that hire expatriates must register their employees with SOCSO and contribute to the Employment Injury Scheme only. Under the Employment Injury Scheme, expatriates are eligible for:

• medical benefits, 
• temporary/permanent disablement benefits, 
• constant-attendance allowances, 
• dependent's benefits and rehabilitation,
• RM 6,500 for repatriation costs, including funerals.

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Sources: Labour Law Box,  EasyExpat

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