> Minimum Conditions of Employment
     
   
The Employment Act 1955 is the main legislation on labour matters in Malaysia.

Paid maternity leave : 60 days
Normal working hours : Not exceeding eight hours in one day or 48 hours in one week.
Paid holiday : At least 10 gazetted public holidays in one calendar year and on any day decared as a public holiday under section 8 of the Holiday Act 1951

>
Paid annual leave for employees:
 
Less than two years of service
: 8 days
Two or more but less than 5 years of service
: 12 days
Over five years of service
: 16 days

>
Paid sick leave per calendar year:
 
Less than two years of service : 14 days
Two or more but less than five years of service : 18 days
Over five years of service : 22 days
Where hospitalisation is necessary : up to 60 days

>
 Payment for overtime work:
 
Normal working days : one-and-a-half times the hourly rate of pay
Rest days : two times the hourly rate of pay
Public holidays : three times the hourly rate of pay
     
    Source: Ministry Of Human Resources
     
   
   
> Statutory Contributions
   
    Minimum contributions under the Employees Provident Fund Act 1991:
    - Employers - Minimum of 12% of the employees' monthly wages
    - Employees - Minimum of 11% of the employees' monthly wages
     
   
All foreign workers and expatriates and their employers are exempted from compulsory contributions. Thay can however choose to contribute at the following rates:
    - Employer - RM5.00 (US$1.51) per employee per month
    - Employee - 11% of the employees' monthly wages
     
   
The Social Security Organisation (SOCSO) administers two social security schemes for workers earning wages not exceeding RM3,000 (US$905) per month. Once covered, workers remain covered irrespective of their wages. However, the maximum contribution is based on wages of RM3,000 (US$905) per month.
     
   
Contribution under Employment Injury Insurance Scheme:
>
 Employers - 1.25% of the employee's wages
>
Employees - Nil
Contribution under the Invalidity Pension Scheme:
>
1% of the employee's wages shared equally by the employer and employee.
     
   
The Human Resources Development Fund (HRDF) operates on the basis of a levy/grant system. Employers who havepaid the Human Resources Development Fun levy will qualify for training grants from the HRDF to defray or subsidise training costs for their Malaysia employees. Manufacturing companies cover under the Human Resources Development Act, 2001 are as follows;
     
   
  Categories of Employers
Rate of Levy Contributions
>
Employers with 50 employees and above (with effect from 1st January 1993) 1% of employees' monthly wages
>
Employers with 10 - 49 employees and paid-up capital of RM2.5 million (US$754,375) and above (with effect from 1 January 1995) and 1% of employees' monthly wages
> Employers with 10 - 49 employees and paid up capital of less than RM2.5 million (US$754,375), are given the option to register with HRDF (with effect from 2 August 1996) 0.5% of employees' monthly wages
     
    Source: Malaysian Industrial Development Authority (MIDA)
     
   
   
> Employment of Expatriates
     
   
For expatriates earning less than RM3,000 (US$905) per month:
>
With employment contracts less than 24 months* : RM1,200 (US$362) levy per year (manufacturing sector)
>
With employment contracts of 24 months or more* : RM1,200 (US$362) levy per year (manufacturing sector)
 
For expatriates earning RM3,000 (US$846) and above per month:
>
With employment contracts less than 24 months* : RM1,200 (US$362) levy per year (manufacturing sector)
>
With employment contracts of 24 months or more** : No levy

For employment pass:
>
RM200 (US$60) per year for an expatriate in a management/professional/technical post
>
RM300 (US$91) per year for an expatriate in a key post (a post permanently filled by an expatriate).
 
  * Visit Pass Temporary Employment
** Employment Pass

Source: Immigration Department
     
     
   
   
> Wage Rates
     
   
 In Malaysia, basic wage rates vary according to location and industrial sector. In addition to salaries, most companies also provide fringe benefits such as free medical treatment, personal accident and life insurance coverage, free or subsidised transport, annual bonus, retirement benefits and enhanced contributions to the Employees Provident Fund. These benefits vary from company to company.
The following information from the Salary and Fringe Benefits Survey for Executives 2007and Salary and Fringe Benefits Survey for Non-Executives 2007 conducted by the Malaysian Employers Federation (MEF) gives an indication of the common practices of companies in Malaysia's manufacturing sector.
   
   

Source: Malaysian Industrial Development Authority (MIDA)
   
   
> Salaries of Executives in the Manufacturing Sector
     
   
An analysis of the salaries of executives in the manufacturing sector shows that the average basic monthly salary ranged from RM2,804 (US$846) (Executives) to RM10,548 (US$3,183) (Senior Managers) to RM18,533 (US$5,592) (Top Executives). The following table shows the average minimum and maximum monthly salaries of selected executive positions.
     
   
 Positions
Min. (RM)
Max. (RM)
Min. (US$)
Max. (US$)
General Manager 9,119 17,023 2,752 5,137
General Manager - Sales & Marketing 7,844 17,375 2,367 5,243
Factory Manager 7,681 15,916 2,318 4,803
Senior Research & Development 7,248 13,043 2,187 3,936
Company Secretary 3,967 9,983 1,197 3,012
Financial Controller 9,205 19,943 2,778 6,018
Operation Manager 5,667 10,850 1,710 3,274
Human Resources Manager 4,960 10,672 1,497 3,220
Quality Assurance / Control Manager 5,548 11,211 1,674 3,383
Business Development Manager 4,948 9,847 1,493 2,971
Purchasing Manager 4,999 9,383 1,508 2,831
Production Manager 4,846 9,892 1,462 2,985
Administration Manager 4,979 10,240 1,502 3,090
Training Manager 4,454 8,019 1,344 2,420
Marketing Manager 4,234 10,072 1,278 3,039
System Analyst 2,485 5,381 750 1,624
Accountant 3,205 6,394 967 1,929
Mechanical Engineer 2,076 5,059 626 1,527
Exec. Secretary/P.A. 2,155 5,049 650 1,524
Electrical/Electronic Engineer 2,171 4,984 655 1,504
Marketing Executive 1,825 4,680 551 1,412
Quality Assurance/Control Executive 1,980 4,270 597 1,288
Programmer 1,898 4,086 573 1,233
    Source: Malaysian Industrial Development Authority (MIDA)
   
   
> Fringe Benefits for Executives
     
   

Annual leave entitlement (median) for executives ranged between 15 to 23 days per calendar year depending on management level and length of service. All of respondent companies provided medical benefits to their executives while 59.6% also extended the facility to dependents. Personal accident insurance was more commonly provided to executives as compared with life insurance.

The more common types of loans provided to executives were car loan, personal loan and computer loan. The overall average salary increase in 2007 was 6.25%. 92.2% of respondent companies granted discretionary bonus to their executives, with an average bonus of 2.15 months.
Source:"Salary and Fringe Benefits Survey for Executives 2006" published by the Malaysian Employers Federation (MEF)
   
     
     
   
   
> Salaries of Non-Executives in the Manufacturing Sector
     
   
An analysis of the salaries of non-executives (operation/technical) in the manufacturing sector shows that the average basic monthly salary ranged from RM733 (US$221) (unskilled workers) to RM1,097 (US$331) (semi-skilled workers) to RM1,570 (US$474) (skilled workers/craftsmen). The following table shows the average minimum and maximum salaries of selected non-executive positions in the manufacturing sector.
     
   
 Non Executive Positions
Min. (RM)
Max. (RM)
Min. (US$)
Max. (US$)
Secretary 1,195 2,280 361 688
IT Supervisor
 1,303 3,386 393 1,022
Chargeman (Medium Pressure)
1,121
2,663
338
804
Production / Technical Supervisor
 1,427 3,116 431 940
Foreman 1,095 2,969 330 896
Boilerman 1,017 2,156 307 651
Maintenance Technician 901 2,074 272 626
Quality Control Inspector 669 1,863 202 562
Storekeeper 846 1,959 255 591
Electrician 779 1,958 235 591
Production Operator (Semi-Skilled)
604
1,459
182
440
Welder 758 1,707 229 515
Accounts Clerk 733 1,797 221 542
Clerk / Typist 672 1,708 203 515
Telephone Operator 714 1,655 215 499
Laboratory Assistant 640 1,751 193 528
Data Entry Clerk 590 1,312 178 396
Lorry / Truck Driver 734 1,692 221 511
Security Guard 596 1,438 180 434
Production Operator (Unskilled)
507
1,146
153
346
     
    Source: Malaysian Industrial Development Authority (MIDA)
   
   
> Fringe Benefits for Non-Executives
     
   

Annual leave entitlement was based on years of service. Half of respondent companies provided between 10 to 14 days for employees with less than two years' service and between 14 to 16 days for those with two to less than five years' service.

Almost all respondent companies 98.2% provided medical benefits to their non-executives with about 38.7% extending the benefit to dependents. 88.3% of the companies provided personal accident insurance to their non-executives. 

A majority of companies provided shift allowance to their employees, generally calculated on a daily basis - up to  RM2.00 (US$0.60) for the first shift, RM2.01-RM4.00 (US$0.61 - 1.21) for the second shift and RM4.01-RM6.00 (US$1.21 - 1.81) for the third shift. In 2007, all of companies granted an increase in salary to either all or selected non-executives, mainly based on performance. The average increase was 5.77% in 2007.

Source: Malaysian Employers Federation (MEF)
     
    Note : USD1 = RM3.3140