Leave entitlements aren’t just about ticking compliance boxes—they’re a key part of building a workplace that attracts, engages, and retains top talent. While adhering to the Employment Act (EA) is essential, offering competitive leave benefits can set your company apart in today’s job market. In this guide, we’ll break down the five types of mandatory leave under the EA and explore additional leave options that can enhance employee satisfaction and well-being.
Mandatory Leaves (As per the Employment Act)
Since 1 January 2023, the Employment Act (EA) applies to all employees, except domestic workers. If your employment contracts offer less than the EA’s minimum leave entitlements, the law overrides it. Keep in mind that the EA only in Peninsular Malaysia and Labuan—Sabah and Sarawak follow their own Labour Ordinances: Sabah Labour Ordinance and Sarawak Labour Ordinance.
Annual Leave (Section 60E of the EA)
Employees earn paid annual leave based on their years of service. Here’s a quick breakdown:
Years of Service | Annual Leave Entitlement |
Less than 2 years | 8 days |
2 to 5 years | 12 days |
5 years or more | 16 days |
Annual leave must be used within 12 months of completing a full year of service. Some companies allow employees to carry forward or cash out unused leave, but this is optional. If an employee resigns before completing a full year, their leave is prorated based on completed months of service.
Sick Leave (Section 60F of the EA)
Employees are entitled to paid sick leave based on their length of service:
Years of Service | Sick Leave Entitlement |
Less than 2 years | 14 days |
2 to 5 years | 18 days |
More than 5 years | 22 days |
Employees can take up to 60 days of paid hospitalization leave per year, which includes their outpatient sick leave entitlement.
Example: If an employee with 14 days of outpatient sick leave has already used 10 days, they’ll have 50 days of hospitalization leave left for the year.
Public Holidays (Section D of the EA)
Employees are entitled to 11 paid public holidays per year. Out of these, 5 are mandatory:
National Day
Yang di-Pertuan Agong’s Birthday
State Ruler’s or Federal Territory Day
Workers’ Day
Malaysia Day
The remaining 6 public holidays are chosen by the employer at the start of each year and must be displayed for employees to see. If a public holiday falls on a rest day, the next working day will be a replacement holiday.
Maternity Leave (Section 37 of the EA)
Female employees are entitled to 98 consecutive days of maternity leave per childbirth. To qualify for maternity allowance, they must:
Have worked for at least 90 days in the 9 months before childbirth
Have worked at any point in the 4 months before childbirth
Have fewer than 5 surviving children
Employers cannot terminate a pregnant employee unless there is a valid reason, such as a willful breach of contract, serious misconduct, or the closure of the business. Any termination outside of these grounds would be considered unlawful.
Paternity Leave (Section 60FA of the EA)
Married male employees are entitled to 7 consecutive days of paid paternity leave per childbirth if they:
Have worked for the company for at least 12 months.
Inform their employer at least 30 days before the expected birth (or as soon as possible afterward).
This applies for up to five childbirths, regardless of the number of spouses.
Voluntary Leaves
Great workplaces go beyond the basics. Offering additional leave options shows employees that you value their well-being, flexibility, and life outside of work. While not legally required, these benefits can boost morale, improve retention, and create a more engaged workforce. Here are some popular leave options that many forward-thinking companies provide.
Birthday Leave
A day off that employees can take to celebrate their birthday. Some employers allow flexibility by letting employees take this leave within the week before or after their actual birthday. Typically: 1 day.
Marriage Leave
Marriage leave is a special type of paid time off given to employees to celebrate their special day. This allows employees to take time off work to prepare for their wedding, celebrate the event, and potentially go on a honeymoon. Typically: 3 to 5 days.
Bereavement Leave
Also known as compassionate leave, this allows employees to take time off following the passing of an immediate family member. It provides the necessary space to grieve, handle funeral arrangements, and support loved ones. Typically: 2 to 5 days.
Family Care Leave
Designed to support employees who need to care for an ill or injured family member. The purpose of family care leave is to support employees during times of family emergencies or health crises, ensuring they can balance their work responsibilities with their responsibilities as caregivers to their loved ones. Typically: 2 to 5 days.
Sabbatical Leave
In essence, a sabbatical leave is just a work break. Typically, employees take sabbaticals after working for an extended period at a company, and they remain employed during this time. It's an opportunity to focus on personal growth activities, like learning new skills, volunteering, or just taking a break to relax and rejuvenate. Leave duration depends on company policy and may be unpaid or partially paid.
Hajj Leave
Muslim employees can take time off to perform the Hajj pilgrimage. This extended leave allows them to fulfil their religious obligations without worrying about work commitments. Depending on company policy, this leave is typically up to 40 days and may be unpaid or partially paid.
Exam Leave
Employees pursuing further studies can take time off to prepare for or sit for important exams. This leave helps employees manage their academic commitments while maintaining their professional responsibilities. Typically: 1 to 5 days.
Mental Health Leave
This leave allows employees to take time off to focus on their mental well-being, manage stress, and seek necessary support. It acknowledges the importance of mental health in maintaining overall productivity and job satisfaction. Typically: 1 to 5 days.
Pet Care Leave
Recognizing the role pets play in employees’ lives, some employers offer time off for pet-related needs. This includes adoption, medical care, or coping with the loss of a pet. Typically: 1 to 3 days.
FAQs
1. Are interns entitled to annual leave?
Not by default. Since interns usually work under a Contract for Service, they’re not covered under the Employment Act, which means there’s no legal requirement for annual leave. That said, many companies offer it as a perk to attract top talent and create a positive internship experience.
2. Do part-time employees qualify for sick leave?
They might! Under the Employment (Part-Time Employees) Regulations 2010, part-time employees can be entitled to prorated sick leave, depending on their working hours and contract terms. A clear employment agreement helps set the right expectations from the start.
3. Can freelancers claim maternity or paternity leave?
Nope. Since freelancers aren’t classified as employees under the Employment Act, they don’t qualify for statutory maternity or paternity leave. But if you work with freelancers long-term, you might want to consider offering some flexibility to retain great talent.
4. What happens if an employee does not use their annual leave?
That’s up to you! Unused leave doesn’t automatically roll over unless your company policy allows it. Some businesses offer leave encashment, but that’s entirely optional. Setting a clear leave policy helps avoid last-minute leave rushes at year-end!
5. Are public holidays paid for part-time employees?
Yes—if they meet the eligibility criteria. Under the Employment (Part-Time Employees) Regulations 2010, part-timers who qualify must be paid for public holidays. Their pay is usually prorated based on their working hours, so it’s good to clarify this in their contract.
Leave Policies Made Simple
Getting leave policies right is crucial—not just for compliance but for building a workplace where employees feel valued. If you’re unsure how to implement or improve your company’s leave policies, we’re here to help. Feel free to reach us at 📞+6 010-277 0718 or drop us an email 📩info@synergy-outsourcing.com if you have any questions!
