Under the Employment Act 1955 and other supporting regulations, employers are required to provide various types of leave including:

• ✅ Annual Leave
• 🤒 Sick Leave
• 🤰 Maternity & Paternity Leave
• 📚 Study or Emergency Leave (based on company policy)
• 🎉 Paid Public Holidays

This guide explores the key provisions of Malaysia's leave entitlements and how companies can stay compliant while supporting employee wellbeing.

📌 Whether you're an HR professional or SME owner, understanding these laws is essential to building a healthy, legally compliant workplace culture.

⚖️ Core Leave Laws All Employers Must Know

Table of Contents

• ✅ Mandatory Leave in Malaysia
• 📅 Annual Leave – Section 60E
• 🤒 Sick Leave - Section 60F
• 🤰 Maternity Leave
• 👨‍👩‍👦 Paternity Leave - Supporting Working Fathers with Family Time
• 🏥 Hospitalizations Leave
• 📌 Pro-rated Leave on Early Termination
• 🌟 Non-Mandatory Leave in Malaysia
• 🚫 Unpaid Leave - A Flexible Option When Paid Leave Is Exhausted
• 🚨 Emergency Leave - A Discretionary Leave Option for Urgent Personal Situations
• 🕊️ Compassionate (Bereavement) Leave - Supporting Employees Through Personal Loss
• Marriage Leave - Celebrating Life Milestones With Time Off
• 🌪️ Disaster Leave - Supporting Employees During Natural Disasters and Emergencies
• 🎂 Birthday Leave - A Thoughtful Perk to Celebrate Personal Milestones
• 👶 Childcare Leave - A Family-Friendly Benefit to Support Working Parents
• 🕋 Hajj Leave - Supporting Muslim Employees on Their Spiritual Journey
• 🔁 Replacement Leave
• 🎓 Study Leave - Encouraging Growth Through Learning Opportunities
• 🗓️ Unused Annual Leave - What Happens When Leave Isn't Fully Utilised?

✅ Mandatory Leave in Malaysia

Staying compliant with these regulations is crucial for avoiding legal risks, employee dissatisfaction, or claims of unfair treatment. The Employment Act 1955 requires all employers in Malaysia to provide certain types of paid leave. One of the key entitlements is annual leave, which ensures that employees have time off for rest and personal matters.

📅 Annual Leave – Section 60E

Employees who have completed at least 12 months of continuous service are entitled to paid annual leave based on their years of employment:

🤒 Sick Leave - Section 60F

Sick leave is a mandatory benefit under Malaysian labour law to ensure employees can recover from illness without loss of income. Section 60F of the Employment Act 1955 outlines the entitlement based on the employee's duration of service.

📋 Paid Sick Leave Entitlement

📝 Sick Leave Conditions

To be eligible for paid sick leave:

• The employee must obtain a Medical Certificate (MC) from:
  • A registered medical practitioner, or
  • A registered dental surgeon (if dental-related)
• (The employer must bear the medical cost)
• The employee must inform the employer within 48 hours of the illness or start of leave.
• Failure to do so may result in the leave being considered unpaid or unauthorized.

💰 Sick Leave Payment & Salary Treatment

• Sick leave is paid at the employee's normal wage rate
• For employees on monthly salary, paid sick leave is already included in the monthly wage
• No salary deductions should be made for valid, approved sick leave

✅ With MOCHI HRMS+, sick leave balances, MC attachment, HR approvals, and payroll integration are fully automated—making it easy to track entitlements and ensure compliance.

🤰 Maternity Leave

Effective 1 January 2023, Malaysia's Employment Act was amended to enhance protections for working mothers. One of the most significant updates is the extension of maternity leave from 60 to 98 consecutive days.

📋 Maternity Leave Entitlement

• 98 consecutive days of paid maternity leave
• Applies to all female employees, regardless of income level
• Employee must have worked with the company for at least 4 months before her expected delivery date

📌 Maternity leave may begin up to 30 days before the expected delivery date, based on medical advice or employee preference.

💰 Maternity Leave Pay

• Maternity leave is fully paid, based on the employee's normal wages
• Employers must treat maternity leave as part of the employee's service continuity

✅ With MOCHI HRMS+, you can easily track maternity leave eligibility, auto-calculate entitlements, and store relevant documents securely—ensuring full compliance with Malaysian employment law.

👨‍👩‍👦 Paternity Leave - Supporting Working Fathers with Family Time

Under the Employment (Amendment) Act 2022, effective 1 January 2023, married male employees in Malaysia are legally entitled to 7 consecutive days of paid paternity leave. This new entitlement supports work-life balance and acknowledges the vital role of fathers during childbirth.

📋 Paternity Leave Entitlement

• 7 consecutive days of paid leave
• Leave must be taken within 60 days of the child's birth
• It is not deducted from annual or sick leave

✅ Eligibility Criteria

To qualify for paid paternity leave, the employee must:

• Be legally married to the child's mother
• Have completed at least 12 months of continuous service with the employer
• Provide notice of the spouse's pregnancy at least 30 days before the expected delivery date, or as soon as reasonably possible after the birth

📌 Employees should submit supporting documents such as a doctor's confirmation letter or birth certificate when requesting paternity leave.

🛑 Employer Obligation

• Paternity leave is mandatory for eligible employees
• Employers who deny this entitlement may face penalties under Malaysian labour law

✅ With MOCHI HRMS+, paternity leave requests can be submitted, tracked, and approved digitally—with documentation securely stored and integrated with payroll.

🏥 Hospitalization Leave - Additional Medical Leave for Serious Health Conditions

In Malaysia, the Employment Act 1955 requires employers to provide up to 60 days of hospitalization leave per year, in addition to the employee's normal sick leave entitlement. This ensures employees can recover from more serious health conditions without losing income.

📋 Entitlement Overview

• Up to 60 days per calendar year
• Applicable only when hospitalization is required
• The 60 days include ordinary sick leave days (not in addition)

For example: If an employee has already used 14 days of paid sick leave, they may still be eligible for up to 46 additional days of hospitalization leave.

✅ Valid Scenarios for Hospitalisation Leave

To qualify, the employee must provide a valid Medical Certificate (MC) issued by a registered medical practitioner. The following situations are covered:

• Hospital admission or outpatient surgery
• Doctor-prescribed bed rest, including pregnancy-related complications
• Post-hospitalization care or treatment follow-up requiring time off

📌 Employers have the right to verify the medical certificate before approving the leave.

💰 Payment During Hospitalization Leave

• Leave is paid at the employee's normal daily wage rate
• For monthly-paid employees, no deductions should be made during approved hospitalization leave

✅ With MOCHI HRMS+, hospitalization leave requests can be filed with MC uploads, auto-tracked against sick leave limits, and approved according to your company's workflow—ensuring transparency and compliance.

🛡️ Protection Against Termination During Pregnancy

Employers are not allowed to terminate or issue a termination notice to an employee during pregnancy or due to a pregnancy-related illness.

However, termination is permitted in the following cases only:

• Willful breach of employment contract
• Serious misconduct (e.g., fraud, theft, insubordination)
• Closure of the employer's business

❗ If termination occurs under any of the above conditions, the employer must prove that the dismissal is not related to the employee's pregnancy or condition.

🇲🇾 Public Holiday Entitlements in Malaysia

Under the Employment Act 1955, Malaysian employees are entitled to 11 paid public holidays each calendar year. These holidays promote national unity and allow employees to rest and observe significant cultural and religious events.

📆 Public Holiday Allocation

• Employers must provide 11 gazette public holidays annually
• At least 5 of these must be pre-selected by the employer and communicated at the beginning of each calendar year
• The remaining are compulsory national holidays, which typically include:
  • National Day
  • Agong's Birthday
  • Malaysia Day
  • Labour Day
  • Any other day as declared by the government

📌 Example: On 28 November 2022, a special holiday was declared to celebrate the formation of the new government following the 15th General Election (GE15)

⚠️ If Employees Work on Public Holidays

If an employee is required to work on a gazette public holiday:

✅ Payment applies regardless of the number of hours worked that day.

📌 Pro-rated Leave on Early Termination

If an employee resigns or is terminated before completing a full year, they are still entitled to pro-rated annual leave.

✅ Calculation Guidelines:

• Based on the number of months worked
• Fractions less than half a day are ignored
• Fractions more than half a day are rounded up to a full day

Example: If an employee works for 7.5 months and leaves, their unused leave will be calculated accordingly and rounded to the nearest full day.

🌟 Non-Mandatory Leave in Malaysia

While the Employment Act 1955 sets out mandatory leave entitlements, many employers in Malaysia go beyond legal requirements by offering non-mandatory (discretionary) leave. These leave types are not legally required but are considered best practices to support employee well-being and foster a positive workplace culture.

🚫 Unpaid Leave - A Flexible Option When Paid Leave Is Exhausted

Unpaid leave is a discretionary form of leave that allows employees to take time off work without receiving wages. It is commonly used when all paid leave entitlements—such as annual leave or emergency leave—have been fully utilized.

Although not mandated by law, unpaid leave can be a practical solution for employees facing personal commitments or unexpected circumstances.

📋 When Is Unpaid Leave Applicable?

Unpaid leave may be requested for situations such as:

• Family emergencies
• Extended travel or personal commitments
• Study or exam periods
• Medical recovery beyond sick leave limits

📌 Approval is subject to the company's policy and management discretion.

✅ Best Practices for Employers

• Clearly outline unpaid leave policies in the employee handbook or HR manual
• Ensure all unpaid leave requests are submitted in writing and approved by management
• Track unpaid leave days accurately to avoid payroll discrepancies or benefit miscalculations

💡 HR Advisory

• Unpaid leave may affect calculations for bonuses, service-based entitlements, or EPF contributions (depending on policy)
• Employers are encouraged to document the approval process for audit and compliance purposes

✅ With MOCHI HRMS+, unpaid leave can be customized, tracked, and integrated into payroll processing automatically—ensuring transparency and alignment with your HR policies.

🚨 Emergency Leave - A Discretionary Leave Option for Urgent Personal Situations

Emergency leave is a non-mandatory form of leave that some employers offer to accommodate unforeseen personal matters such as family emergencies, accidents, or sudden obligations. While not required by Malaysian labour law, it is often provided as part of a compassionate or flexible leave policy.

📋 Common Emergency Leave Practice

• Typically granted as 2 to 3 days per calendar year
• May be listed as a separate leave category or deducted from annual leave
• Additional days may be treated as unpaid leave, subject to management approval

✅ Guidelines for Employees

To ensure responsible use of emergency leave, employees should:

• Notify their employer as soon as reasonably possible
• Provide a valid explanation for the absence
• Submit relevant documentation if requested (e.g. hospital admission note, police report)

📌 Employers may reserve the right to request evidence for record-keeping or audit purposes.

🧭 HR Tip

• Include emergency leave policies in the employee handbook for consistency
• Use MOCHI HRMS+ to track usage, prevent misuse, and generate reports for management insights

✅ With MOCHI HRMS+, emergency leave categories can be configured with custom rules, approval flows, and system alerts—giving your team flexibility without losing control.

🕊️ Compassionate (Bereavement) Leave - Supporting Employees Through Personal Loss

Although compassionate leave—also known as bereavement leave—is not mandated under Malaysian labour law, it is widely practiced among responsible employers as a gesture of care and support during times of personal loss.

This type of leave allows employees to take time off to mourn the passing of immediate family members and manage related responsibilities.

📋 Common Practice

• Typically offered as 2 to 5 days of leave
• May be paid or unpaid, depending on the employer's policy
• Most commonly applies to the death of:
  • Spouse
  • Parents / Parents-in-law
  • Children
  • Siblings
  • Grandparents (optional by policy)

📌 Some companies may also extend compassionate leave to cover miscarriages or close extended family, based on internal discretion.

✅ Best Practices for Employers

• Clearly outline eligibility and duration in the employment contract or employee handbook
• Allow employees to take the leave immediately or within a reasonable time frame after the loss
• Require supporting documentation where necessary (e.g. death certificate, obituary)

✅ With MOCHI HRMS+, compassionate leave can be set up as a custom leave type with auto-approval workflows, documentation upload, and tracking—all while preserving sensitivity and confidentiality.

💍 Marriage Leave - Celebrating Life Milestones With Time Off

Marriage leave, also referred to as matrimonial leave, is a discretionary benefit offered by many employers in Malaysia to allow employees time off for their own wedding or to attend the weddings of immediate family members.

Although not required by Malaysian labour law, offering marriage leave demonstrates care for employee life events and contributes to a positive work culture.

📋 Common Marriage Leave Practices

• Typically granted as 1 to 3 days of paid leave
• Most commonly applies to an employee's own wedding
• Some companies may extend it to cover:
  • Children's weddings
  • Siblings' or close family weddings (subject to company policy)

📌 Leave is usually only claimable once per employee for their own marriage.

✅ HR Guidelines

• Leave requests should be made in advance, with supporting documents (e.g. wedding invitation, marriage certificate)
• Companies should clearly state their marriage leave policy in the employee handbook or contract
• Approval is subject to managerial discretion and team scheduling

✅ With MOCHI HRMS+, marriage leave can be pre-configured as a special leave type with one-time eligibility, approval routing, and required documentation uploads—making it simple and structured.

🌪️ Disaster Leave - Supporting Employees During Natural Disasters and Emergencies

Disaster leave is a discretionary form of leave provided by employers to support employees affected by natural disasters or emergency situations, such as floods, landslides, or large-scale public safety incidents.

Although not mandated by Malaysian labour law, disaster leave is increasingly recognized as part of responsible employer practices, especially in high-risk or flood-prone areas.

📋 Common Practice

• May be offered as paid or unpaid leave, depending on the company's policy
• Duration typically ranges from 1 to 5 days, based on the severity of the situation
• Leave may apply to:
  • Severe floods
  • Fire incidents
  • Evacuation orders
  • Major transportation disruptions
  • Government-declared natural disasters or states of emergency

📌 Employers may refer to National Disaster Management Agency (NADMA) or National Center for Disaster Management (NCDM) guidelines during crisis events.

✅ Best Practices for Employers

• Document disaster leave as part of a Business Continuity or Employee Welfare Policy
• Allow flexible proof of emergency, such as photos, news clippings, or local authority notices
• Use discretion and compassion when handling such requests

✅ With MOCHI HRMS+, disaster leave can be added as an on-demand leave type, triggered during emergencies and managed through flexible approval routes.

🎂 Birthday Leave - A Thoughtful Perk to Celebrate Personal Milestones

Birthday leave is a discretionary benefit offered by some employers in Malaysia to allow employees to take a day off on or around their birthday. While not required by law, this gesture can go a long way in boosting morale, enhancing employee experience, and reinforcing a culture of appreciation.

📋 Common Practice

• Usually granted as 1 paid day off per calendar year
• Can be taken on the birthday itself, or within a designated window (e.g. ±7 days)
• May be subject to:
  • Prior approval of the reporting manager
  • Submission of ID copy or declaration for verification
  • Use within the employee's birthday month only

📌 Most companies apply for a one-time entitlement per year, and unused birthday leave may not be carried forward.

✅ Benefits to Employers

• Enhances employee engagement and satisfaction
• Fosters a culture that values work-life balance and individuality
• Differentiates your organization as a people-first employer

✅ With MOCHI HRMS+, birthday leave can be auto-triggered based on employee birthdates, complete with custom notification reminders, usage tracking, and auto-expiry settings.

👶 Childcare Leave - A Family-Friendly Benefit to Support Working Parents

Childcare leave is a non-mandatory leave type that some employers in Malaysia offer to employees who are parents of young children. While not required under the Employment Act 1955, this benefit can significantly improve work-life balance and employee retention, especially for working mothers and fathers managing early parenthood.

📋 Common Practice

• Typically provided as 1 to 5 days per year
• May be paid or unpaid, based on company policy
• Most granted for:
  • Caring for a newborn or toddler
  • Medical appointments or emergencies involving a child
  • Transitional moments like first day of school or vaccinations

📌 Employers often extend this benefit to parents with children under a certain age (e.g. 7 or 12 years old), as defined in the employee handbook.

✅ Why Employers Offer Childcare Leave

• Complements Malaysia's 7-day paternity leave, which may be insufficient for new fathers
• Shows commitment to family-first values
• Helps reduce absenteeism and turnover due to family-related stress

🔍 Policy Considerations

• Define eligibility criteria (e.g. married, legal guardian, child's age)
• Set clear procedures for advance notice and documentation
• Ensure leave balances and usage are tracked in your HR system

✅ With MOCHI HRMS+, you can configure childcare leave as a custom category, automate entitlement rules, and keep accurate records—supporting a family-friendly work environment while staying organized.

🕋 Hajj Leave - Supporting Muslim Employees on Their Spiritual Journey

Hajj leave is a non-mandatory, but widely respected benefit that many Malaysian employers offer to Muslim employees undertaking the pilgrimage to Mecca. While not required under the Employment Act 1955, this leave reflects cultural sensitivity and supports religious obligations.

📋 Common Practice

• Duration: 30 to 40 consecutive days
• May be granted as paid or unpaid leave, depending on the company's internal policy
• Typically offered once in a lifetime per employee

📌 Most companies require the employee to have completed a minimum service period (e.g. 5 years) before becoming eligible for Hajj leave.

✅ Employer Considerations

• Include clear eligibility criteria in the HR policy
• Require employees to submit:
  • Official documentation of Hajj registration
  • Leave application form in advance (e.g. 1–3 months' notice)
• Decide whether the leave will affect bonus, increment, or service calculations (transparency is key)

💡 Best Practice Tip

Many employers treat Hajj leave as a special category separate from annual or unpaid leave, to preserve entitlements while honoring the employee's spiritual commitment.

✅ With MOCHI HRMS+, Hajj leave can be set as a unique one-time entitlement, with custom eligibility rules, document uploads, and automated approval flows—making religious leave respectful, smooth, and compliant.

🔁 Replacement Leave - A Fair Alternative to Overtime Pay on Rest Days & Public Holidays

Replacement leave, also known as time off in lieu, is a practice where employees who work on their rest days or public holidays are compensated with a day off at a later date, instead of receiving overtime pay. This is legally permissible under the Employment Act 1955 and widely adopted across many Malaysian workplaces.

📋 When Is Replacement Leave Applicable?

Replacement leave is commonly granted when employees are required to work on:

• 📅 Gazette public holidays
• 💤 Weekly rest days
• 🕒 Scheduled off days, due to operational demands

📌 Employers must ensure that such arrangements are mutually agreed upon in advance and documented to avoid disputes.

✅ Key Guidelines

• Replacement leave should be taken within a reasonable period (commonly within 1–3 months)
• The replacement day off should be equivalent to one full working day
• Companies should maintain proper records for all replacement leave approvals

📎 Employers may still be required to pay a premium rate if replacement leave is not granted or if the employee refuses the option.

💡 Best Practices for Employers

• Clearly outline replacement leave policies in employment contracts or HR manuals
• Ensure employees understand their entitlement and how to apply
• Use MOCHI HRMS+ to auto-track eligible workdays and manage leave approvals seamlessly

✅ With MOCHI HRMS+, replacement leave requests and eligibility are automatically logged when employees work on public holidays or off days—ensuring fair compensation, transparency, and proper documentation.

🎓 Study Leave - Encouraging Growth Through Learning Opportunities

Study leave is a discretionary leave benefit granted to employees who are pursuing educational or certification programs that contribute to their professional development and align with the organization's goals.

Although there is no statutory requirement under Malaysian law to provide study leave, many progressive employers choose to offer it to support skill-building and lifelong learning.

📋 When Is Study Leave Granted?

Employers may grant study leave for purposes such as:

• Attending short-term professional courses or workshops
• Sitting for examinations required for certifications or licenses (e.g. HRDF Trainer, ACCA, PMP, etc.)
• Participating in company-sponsored education programs or upskilling initiatives

📌 Approval is typically based on whether the course or exam is relevant to the employee's current role or future responsibilities within the organization.

✅ Best Practices for Employers

Define clear eligibility criteria, such as:

• Minimum service period (e.g. 6–12 months)
• Relevance to job scope
• Minimum performance rating

Set reasonable limits for:

• Number of days allowed
• Whether leave is paid or unpaid
• Supporting documents required (e.g. exam slips, enrollment letters)

Consider linking study leave to bonding clauses if the course is company-funded

✅ With MOCHI HRMS+, you can configure study leave as a special category, track usage, attach proof documents, and align it with your employee development goals—all in one platform.

🗓️ Unused Annual Leave - What Happens When Leave Isn't Fully Utilised?

Under Malaysian labour regulations, employees are encouraged to utilize their annual leave within 12 months from the date it is earned. However, situations may arise where employees still have unused leave at the end of the entitlement period.

While the Employment Act 1955 does not specifically regulate how unused leave must be handled, employers typically adopt one of the following three common practices, as part of their internal leave policy.

📋 1. Carry Forward

• Employees may be allowed to carry forward unused annual leave to the following year.
• Commonly, a maximum of 5–10 days may be carried forward
• Carried forward leave is usually valid for a limited period (e.g. must be used within 3–6 months)
• Terms must be clearly stated in the employment contract or employee handbook

💰 2. Encashment (Leave Payment)

• Employers may choose to encash unused annual leave, compensating employees based on their ordinary rate of pay.
• Calculation: 👉 Monthly salary ÷ 26 = 1 day's wage
• Payment is usually reflected in the final payroll of the year or during termination of employment

📌 This is a discretionary practice and not legally required unless part of the employment agreement.

❌ 3. Forfeiture ("Use It or Lose It" Policy)

• Some employers implement a forfeiture policy, where any unused leave after the entitlement period is automatically forfeited.
• Common in industries with seasonal demand or strict scheduling
• Policies must be clearly communicated to employees in advance
• Employers are encouraged to remind employees before forfeiture deadlines

💰 Payment for Unused Leave

Upon termination or resignation, any unused annual leave must be paid out to the employee.

The standard rate is calculated as:

👉 Monthly salary ÷ 26 days = 1 day's pay

Employers may offer a more favorable formula if stated in the employment contract or company policy

✅ With MOCHI HRMS+, pro-rated leave, payout calculations, and unused leave balances are automated—making it easy to stay compliant without manual tracking.

This guide is for informational purposes only and should not be considered as legal advice. Please consult with qualified legal professionals for specific employment law matters.