Employee or Contractor?


Who Can I Employ?
You can employ almost any local citizens. A person whom you employ under a contract of service is an employee.In Peninsular Malaysia, employees are being defined in the Employment Act 1955 whereas in Sabah and Sarawak, an employee is defined in the Labour Ordinance (Sabah Cap. 67) and Sarawak Labour Ordinance (Cap. 76) respectively.
An employee under the Employment Act 1955 means :

  • any person whose earning between RM1,500 and RM5,000 per month under a contract of service with an employer which covers wages, allowances or other cash benefits
  • any person who irrespective of the wages earns in a month has entered into a contract of service with an employer and disengaged in
    • manual labour
    • engaged in the operation of mechanically propelled vehicles
  • one who supervises and oversees employees in manual labour
  • any person engaged in any capacity in any vessel registered in Malaysia with certain exception

One can also employ foreign workers. However, subject to certain requirements, you can only employ foreign workers in the plantation and manufacturing sectors and only nationals of Cambodia, Indonesia, Philippines, Sri Lanka, Thailand, Bangladesh and Pakistan are permitted to be employed in these sectors.


Complaints to Higher Authority
In the event of any complaints on employment to be made by an employee, the said employee can lodge a complaint to the nearest Department of Labour Office or JabatanBuruh.
In the event of cases of unfair dismissal, employees covered and not covered under these Acts or Ordinance can voice their complaint to the Industrial Relations Department.
An employer is forbidden from engaging women to carry out underground, industrial and agricultural work between 10:00 PM to 5:00 AM without exemption from the Directory General of Department of Labour.


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