Generally, Malaysians work eight hours a day or 48 hours a week. The Employment Act governs the terms and conditions of employment and stipulates the rights and obligations of employers and employees. The Act applies to employees earning not more than RM2,000 a month (1 April 2012).
The EPF provides for a compulsory contributory provident fund which is payable to employees in full on reaching the age of 55, or earlier in the case of incapacity or upon permanently departure from Malaysia. Both the employer and employee are required to contribute to the EPF at 13% and 11% (respectively) of the employees’ monthly wages. Self-employed persons, expatriates and domestic servants are exempted from compulsory contribution. They can, however, choose to contribute to the fund.
The Social Security Organization (SOCSO) administers the Employment Injury Insurance Scheme and the Invalidity
Pension Scheme, as provided under the Employees’ Social Security Act 1969.
All establishments employing workers (who are Malaysian or permanent resident) earning wages not exceeding RM4,000 a month are required to insure their workers under the two social security schemes.
The Human Resources Development Fund (HRDF) operates based on a levy/grant system. Employers who have paid the Human Resources Development levy will qualify for training grants from the HRDF to defray or subsidize training costs for their Malaysian employees.