Thinking of Hiring in Malaysia? Start with the Law First.
Before you post that job ad, make sure you know what’s legally required in Malaysia. From EPF to probation terms, here's what SME leaders must not overlook.
HUMAN RESOURCE
Brendon Lai
4/5/20251 min read
Part 1. Legal Framework: Know Your Obligations
Hiring without understanding Malaysia’s labor regulations is a recipe for future trouble. Here are key points to be aware of:
Employment Contracts: Contracts must be in writing, clearly stating terms like salary, working hours, probation period (commonly 3–6 months), and termination clauses. English is widely used in formal contracts.
Statutory Contributions: Employers must contribute to:
EPF (Employees Provident Fund): Retirement savings plan.
SOCSO: Social security protection for employees.
EIS (Employment Insurance System): For unemployment benefits.
Work Permits for Foreign Hires: If you're considering bringing in foreign talent, be aware that Malaysia has specific quotas and approval processes depending on industry and job category.
🔍 Tip: Consider engaging a local payroll or PEO (Professional Employer Organization) service during your early hiring phase to stay compliant.