Malaysia
Mandatory statutory contributions for non-Malaysian employees
Impact date: 1 October 2025 The Employees Provident Fund (Amendment) Act 2025 has been gazetted. The Act amends the Employees Provident Fund Act 1991 to introduce mandatory statutory contributions for non-Malaysian employees for the first time. Although a commencement date has not been officially gazetted, the Employees Provident Fund has announced that it will take effect with wages for October 2025, for the contribution month of November 2025.
The Act makes provisions relating to the liability to pay contributions and the rate of contributions payable on an employee who is not a Malaysian citizen, and mandates foreign workers and their employers to contribute 2% of the employee’s monthly wages to the retirement fund.
Employer implications/action needed All employers should make arrangements with their payroll department or service provider for non-Malaysian employees to be properly registered so payments can be made in relation to October wages.
Employer risk Non-compliance may result in regulatory action and penalties.
Link https://www.kwsp.gov.my/en/employer/responsibilities/non-malaysian-citizen-employees
Potential increase of retirement age from 60 to 65
Impact date: Awaited The Government is currently reviewing a proposal to raise the retirement age from 60 to 65. Under current laws, the mandatory retirement age for civil servants is 60, while private sector employees have a minimum retirement age of 60 pursuant to the Minimum Retirement Age Act 2012.
Employer implications/action needed N/A
Employer risk N/A
Link
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Human Resources Ministry to set up one-stop labor centre in Penang
Impact date: Awaited The Human Resources Ministry will be setting up a one-stop labor centre in Penang. This pilot project will consolidate the work scope currently handled by numerous offices such as the labor office, Industrial Relations Department, Industrial Court, Trade Union Affairs Department, and Social Security Organization. The long-term plan is for similar one-stop centres to be opened nationwide.
Employer implications/action needed Once the one-stop centre is operational, employers in Penang will have to ensure that any employment administrative or regulatory matters are redirected accordingly.
Employer risk N/A
Link N/A
Gig Workers Bill passed
Impact date: Awaited The landmark Gig Workers Bill 2025 was passed by the Dewan Rakyat (House of Representatives) on 28 August 2025 and the Dewan Negara (Senate) on 9 September 2025. The Bill means that gig workers will be formally recognized as a distinct category of the labor force, and will be afforded statutory rights and protection.
The Bill plugs gaps in the law, and will benefit the estimated 1.2 million Malaysians in the gig economy. The Bill imposes obligations on parties engaging gig workers to provide contracts which clearly state minimum standards for payment terms, working arrangements, insurance coverage, and termination procedures. The Bill also introduces a Gig Workers Tribunal, which is empowered to resolve disputes and order remedies.
The Bill still has to be officially published in the Gazette, before an implementation date is fixed.
Employer implications/action needed Parties who engage gig workers falling within the scope of the Bill should review their existing contracts and engagement processes to ensure that they comply with the Bill when it comes into force.
Employer risk Non-compliance may result in claims or regulatory action and penalties. The Bill provides for penalties of up to a fine of RM50,000, or imprisonment of up to two years, or both.
Link List of Bills on Parliament website: https://www.parlimen.gov.my/bills-dewan-rakyat.html?uweb=dr&lang=en#
Employees’ Social Security (Amendment) Bill 2025 passed
Impact date: Awaited The Employees’ Social Security (Amendment) Bill 2025 was passed by the Dewan Rakyat (House of Representatives) in November 2025. The Bill seeks to amend the Employees’ Social Security Act 1969, introducing a new social security scheme — the “Non-Employment Accident Injury Scheme” — which will extend social security protection to employees for accidents which occur outside working hours, and which are not employment-related.
The Bill still has to be passed by the Dewan Negara (Senate), and then officially published in the Gazette, before an implementation date is fixed.
Employer implications/action needed All employers should monitor the progress of this Bill to ensure that they comply with the Bill when it comes into force.
Employer risk Non-compliance may result in claims or regulatory action and penalties.
Link List of Bills on Parliament website: https://www.parlimen.gov.my/bills-dewan-rakyat.html?uweb=dr&lang=en#
Employment Insurance System (Amendment) Bill 2025 passed
Impact date: Awaited The Employment Insurance System (Amendment) Bill 2025 was passed by the Dewan Rakyat (House of Representatives) in November 2025. The Bill seeks to amend the Employment Insurance System Act 2017 to extend its scope to cover employment services to any person and to implement programs, schemes, measures, or financial assistance relating to the active labor market to any person. The Bill also seeks to improve the benefits to insured persons, and strengthen the governance, process and operation of the existing Act.
Other improvements proposed under the Bill include increased benefit rates, and the introduction of a new benefit — the Mobility Assistance Allowance — pursuant to which contributors who lose their jobs will be entitled to protection and training support of up to RM25,000. The Bill also proposes increases to the Early Re-employment Allowance, training allowances, and fees.
The Bill still has to be passed by the Dewan Negara (Senate), and then officially published in the Gazette, before an implementation date is fixed.
Employer implications/action needed All employers should monitor the progress of this Bill to ensure that they comply with the Bill when it comes into force.
Employer risk Non-compliance may result in claims or regulatory action and penalties.
Link List of Bills on Parliament website: https://www.parlimen.gov.my/bills-dewan-rakyat.html?uweb=dr&lang=en#
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