What You Should Know About Paid and Unpaid Leave in Malaysia

In this article, we will explain more about paid and unpaid leave in Malaysia as well as the laws related to it.

What is paid leave?

Paid leave means any kind of time that is taken off of an employee's work WITH pay. It includes annual leave, sick leave, maternity/paternity leave, and public holidays.

What is unpaid leave?

Unpaid leave refers to time off from work during which an employee does not receive a salary for the length of their absence. 

Public holiday is not a part of annual leave.

Malaysian law on paid and unpaid leave

1. Paid leave

• Public holidays: Section 60D(1) of the Employment Act 1955 states that an employee is entitled to paid holidays on eleven of the gazetted public holidays and any other day appointed as a public holiday under Section 8 of the Holidays Act 1951.
• Maternity leave: Part IX (Maternity Protection) of the Employment Act 1955 stated that female employees are entitled to at least 60 consecutive days of paid maternity leave. 
• Annual leave: Section 60E(1) from the Employment Act 1955 states An employee is entitled to a certain number of paid annual leave days in addition to rest days and paid holidays. 
• Sick leave: Section 60F(3) of the Employment Act 1955 states:" The employer shall pay the employee his ordinary rate of pay for every day of such sick leave and an employee on a monthly rate of pay shall be deemed to have received his sick leave pay if he receives from his employer his monthly wages, without abatement in respect of the days on which he was on sick leave..."

2. Unpaid leave

The Employment Act 1955 made no mention of unpaid leave. However, it is generally accepted that employers cannot force employees to take unpaid leave. Employers must always come to a mutual arrangement with their employees if they require their employees to take unpaid leave

Manual calculation of unpaid leave

1. Find the number of working days in the current month.
2. Use this number to calculate how much the employee is paid daily (monthly salary/working days in a month).
3. Multiply this number by the total days of unpaid leave.

Example:

Ali earned RM 2,000 a month and took 4 days of unpaid leave in September 2020. How much should be deducted?

Following the steps listed above, we find:

• There are 21 working days in September 2020
• Ali earns RM 95.24 per day (2000/21).
• As Ali has taken 4 days off, the total deduction should be RM 380.95 (2000x4/21).

Employees are entitled to their ordinary pay rate for every day of their sick leave

Frequently Asked Questions on Paid and Unpaid Leave in Malaysia

1. Can employers instruct employees to take annual leave or to deduct the annual leave?

Employers cannot force their employees to take annual leave, as annual leave shall only be granted upon employees' discretion and application.

2. Are sick leave and maternity leave considered as annual leave?

No, they are not considered as annual leave. When an employee takes sick leave or maternity leave, the annual leave shall be deemed to have not been taken in respect of the days for which sick leave or maternity leave is so granted.

3. Are employees entitled to their ordinary pay rate for their sick leave?

Yes, they are entitled to their ordinary pay rate for every day of their sick leave, including hospitalisation.

4. Can an employer terminate an employee who is on her maternity leave?

Section 37(4) of the Employment Act 1955 provides strictly against any employer who terminates the service of a female employee during maternity leave unless such termination is on the ground of closure of the employer's business.

5. How many paid public holidays do we have?

The 10 Public Holidays listed in the First Schedule of the Holidays Act is as follows:

• Chinese New Year
• Wesak Day
• Hari Raya Aidilfitri
• Independence Day on 31 August
• Hari Raya Haji
• Agong's Birthday
• Malaysia Day on 16 September
• Deepavali
• Prophet Muhammad's Birthday
• Christmas Day 25 December

It should be noted that in the States of Kelantan and Terengganu celebrate Chinese New Year for only one day, while other states celebrate it for two days. Kelantan and Terengganu also celebrate Hari Raya Haji for two days while other states celebrate it for one day.

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The 4 Types of Paid Leaves in Malaysia 
What is Emergency Leave and How Does it Work in Malaysia? 
HR Guide: Managing Employee Sick Leaves