HR Policy Handbook (Malaysia)
HR POLICY HANDBOOK
Employment Act 1955 (Amended 2022) | Industrial Relations Act 1967 | EPF Act 1991 | OSHA 1994 | Employees' Social Security Act 1969
Employer: [Employer Name] (SSM No. [SSM Number])
Address: [Employer Address]
HR Contact: [HR Email]
Effective Date: [Effective Date]
1. INTRODUCTION
1.1 This HR Policy Handbook sets out the employment policies and procedures of [Employer Name]. The policies in this Handbook supplement but do not replace the individual Employment Contract and the statutory minimum entitlements prescribed by the Employment Act 1955 (as amended by the Employment (Amendment) Act 2022).
1.2 Where any provision of this Handbook is less favourable than the statutory minimum under the Employment Act 1955, the statutory minimum shall prevail.
2. WORKING HOURS AND OVERTIME
2.1 Normal Working Hours: [Normal Working Hours]
2.2 Working hours comply with Section 60A of the Employment Act 1955, which sets a maximum of 45 hours of normal work per week (effective 1 January 2023 per EA 2022 amendment).
2.3 Overtime Compensation: [Overtime Rate]
3. LEAVE ENTITLEMENTS
3.1 Annual Leave: [Annual Leave]
3.2 Sick Leave: [Sick Leave]
3.3 Maternity Leave: [Maternity Leave]
3.4 Paternity Leave: [Paternity Leave]
3.5 Other Leave: [Other Leave]
3.6 Public holidays are observed in accordance with Section 60D of the Employment Act 1955 — a minimum of 11 gazetted public holidays per year.
4. EPF, SOCSO, AND EIS CONTRIBUTIONS
4.1 EPF Contributions: [EPF Rate]
4.2 SOCSO / PERKESO and EIS Contributions: [SOCSO Rate]
4.3 Additional Company Benefits: [Additional Benefits]
5. OCCUPATIONAL SAFETY AND HEALTH
5.1 [Employer Name] is committed to providing a safe and healthy workplace for all employees in accordance with the Occupational Safety and Health Act 1994 (OSHA 1994), Section 15 (general duty of employer).
5.2 All employees must comply with safety procedures, report hazards and accidents, and participate in safety training. Workplace incidents must be reported to the Department of Occupational Safety and Health (DOSH) as required by OSHA 1994.
6. DISCIPLINARY PROCEDURES
6.1 Disciplinary Procedure: [Disciplinary Process]
6.2 Summary dismissal for gross misconduct requires a fair domestic inquiry process consistent with the Industrial Relations Act 1967 and the Code of Conduct for Industrial Harmony 1975 before dismissal takes effect.
6.3 Termination Notice: [Termination Notice]
6.4 Employees who believe they have been unfairly dismissed may file a representation to the Director General of Industrial Relations under Section 20 of the Industrial Relations Act 1967 within 60 days of dismissal.
7. GRIEVANCE AND HARASSMENT PROCEDURES
7.1 Employees who have workplace grievances should raise them with their line manager or directly with the HR department at [HR Email].
7.2 Sexual harassment complaints shall be handled in accordance with the Code of Practice on the Prevention and Eradication of Sexual Harassment in the Workplace issued by the Ministry of Human Resources.
8. ACKNOWLEDGEMENT
By signing below, the employee confirms receipt of this HR Policy Handbook and agrees to read, understand, and comply with its provisions.
Employer / HR Representative
________________
Signature
Employee
________________
Signature
What Is a HR Policy Handbook (Malaysia)?
A HR Policy Handbook (Malaysia) in Malaysia a Malaysia HR Policy Handbook is a thorough organisational document that sets out the employment policies, procedures, entitlements, and rules governing the employer-employee relationship, supplementing the statutory minimum standards prescribed by the Employment Act 1955 (as amended by the Employment (Amendment) Act 2022). An HR Policy Handbook provides employees with clear guidance on their rights and obligations and provides employers with a documented framework for consistent application of employment policies.
The Employment Act 1955 (EA 1955) is the primary statute governing employment in Malaysia for employees earning up to RM4,000 per month (after the EA 2022 amendment removed the previous salary threshold for most EA protections). Key provisions of the EA 1955 include working hours (Section 60A — maximum 45 hours per week after the 2022 amendment), overtime rates (Sections 60A–60D), annual leave entitlements (Section 60E), sick leave (Section 60F), maternity leave (Section 37 — extended to 98 days by the EA 2022 amendment), and termination and layoff benefits (Sections 60N–60P).
The Industrial Relations Act 1967 (IRA 1967) governs the relationship between employers, employees, and trade unions in Malaysia, including procedures for trade union recognition, collective bargaining, and dispute resolution through the Industrial Court. An HR Policy Handbook should address the employer's procedures for handling industrial disputes in a manner consistent with the IRA 1967.
The Occupational Safety and Health Act 1994 (OSHA 1994) requires employers in Malaysia to provide a safe and healthy working environment for all employees. Section 15 of the OSHA 1994 imposes a general duty on employers to confirm the safety, health, and welfare of their employees, including providing a written Safety and Health Policy for organisations with five or more employees under Section 16 of the OSHA 1994.
The Employees Provident Fund Act 1991 (EPF Act 1991) and the Employees' Social Security Act 1969 (SOCSO Act 1969) impose mandatory contribution obligations on employers. An HR Policy Handbook should document these statutory deduction and contribution obligations to confirm employee understanding.
The legal framework governing the HR Policy Handbook (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a HR Policy Handbook (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Employment Act 1955 (Act 265) sets the foundational requirements.
When Do You Need a HR Policy Handbook (Malaysia)?
A Malaysia HR Policy Handbook is needed by any employer in Malaysia with employees, to document the policies and procedures governing the employment relationship and demonstrate compliance with Malaysian employment laws.
An HR Policy Handbook is required when a Malaysian employer needs to communicate the company's leave policies — including annual leave entitlements under Section 60E of the Employment Act 1955, sick leave under Section 60F, maternity leave (98 days under the EA 2022 amendment), paternity leave (7 days under the EA 2022 amendment), and any additional company leave such as compassionate leave, examination leave, or marriage leave — consistently to all employees.
An HR Policy Handbook is needed when an employer needs to document disciplinary procedures that comply with the Employment Act 1955 and the Industrial Relations Act 1967. Malaysian courts and the Industrial Court require employers to follow a fair and consistent disciplinary process before dismissing an employee for misconduct, including domestic inquiry procedures where appropriate.
An HR Policy Handbook is required when an employer is subject to the Occupational Safety and Health Act 1994 (OSHA 1994). Section 16 of the OSHA 1994 requires employers with five or more employees to prepare and keep current a written Safety and Health Policy, which is most efficiently integrated into the HR Policy Handbook.
An HR Policy Handbook is necessary when a foreign multinational with Malaysian operations under the Companies Act 2016 seeks to communicate group-wide employment policies to its Malaysian workforce, adapting them to comply with Malaysian statutory minimums under the Employment Act 1955 and the EPF Act 1991.
An HR Policy Handbook is needed when an employer establishes hybrid or remote working arrangements for employees following the COVID-19 pandemic. The EA 2022 amendment introduced flexible working arrangement provisions under Section 60P of the Employment Act 1955, requiring employers to respond to employee requests for flexible work within 60 days in writing.
What to Include in Your HR Policy Handbook (Malaysia)
A thorough Malaysia HR Policy Handbook must contain the following essential elements reflecting Malaysian statutory requirements.
Introduction and Employment Contract Reference: A statement that the HR Policy Handbook supplements but does not replace the individual Employment Contract and that the Employment Act 1955 (as amended 2022) sets the minimum statutory standards that override any contrary policy.
Working Hours and Overtime: Working hours in compliance with Section 60A of the Employment Act 1955 — maximum 45 hours per week (reduced from 48 hours by the EA 2022 amendment), with overtime payable at 1.5 times the hourly rate for hours exceeding normal working hours on normal working days, double time on rest days, and triple time on public holidays under Sections 60A–60D.
Leave Entitlements: Annual leave entitlements under Section 60E (minimum 8 days for the first 2 years, 12 days for 2-5 years, 16 days for over 5 years), hospitalisation sick leave under Section 60F, maternity leave of 98 consecutive days under the EA 2022 amendment (applicable to all female employees), paternity leave of 7 days under the EA 2022 amendment, and public holidays under Section 60D.
EPF and SOCSO Contributions: Mandatory EPF contribution rates under the Employees Provident Fund Act 1991 (employer: 13% for salaries up to RM5,000; 12% above RM5,000; employee: 11% for Malaysians, 5.5% for non-citizens), and SOCSO/PERKESO contributions under the Employees' Social Security Act 1969.
Disciplinary Procedures: The process for handling misconduct allegations, including preliminary investigation, show cause letter, domestic inquiry procedures, and the range of disciplinary sanctions (written warning, final warning, suspension, dismissal). Procedures must be fair and consistent with the Industrial Relations Act 1967 to withstand Industrial Court scrutiny.
Grievance and Harassment Procedures: A procedure for employees to raise workplace grievances and complaints of sexual harassment under the Code of Practice on the Prevention and Eradication of Sexual Harassment in the Workplace issued by the Ministry of Human Resources.
Termination and Retrenchment: Termination notice periods under Section 12 of the Employment Act 1955 (minimum 4 weeks for over 2 years service), retrenchment benefit entitlements under the Employment (Termination and Lay-Off Benefits) Regulations 1980, and the procedural requirements for retrenchments including notification to the Department of Labour.
Safety and Health Policy: A statement of the employer's commitment to occupational safety and health under the Occupational Safety and Health Act 1994, Section 16, identifying the person responsible for safety and health management.
Additional compliance elements for a HR Policy Handbook (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). HR Policy Handbook (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/employment/hr-forms/hr-policy-handbook-malaysia
"HR Policy Handbook (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/employment/hr-forms/hr-policy-handbook-malaysia.
@misc{formslegal-hr-policy-handbook-malaysia,
author = {{Forms Legal}},
title = {HR Policy Handbook (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/employment/hr-forms/hr-policy-handbook-malaysia}},
note = {Free legal document template. Based on Employment Act 1955 (Act 265)}
}Frequently Asked Questions
No single Malaysian law requires all employers to maintain a document titled 'HR Policy Handbook.' However, several obligations under Malaysian employment law are most effectively discharged through a documented HR policy. Section 16 of the Occupational Safety and Health Act 1994 (OSHA 1994) requires employers with five or more employees to prepare a written Safety and Health Policy, which is typically included in the HR Policy Handbook. The Employment Act 1955 and the Industrial Relations Act 1967 require employers to follow consistent and fair disciplinary procedures before dismissing employees. Malaysian Industrial Court decisions consistently emphasise the importance of documented policies in establishing that an employer acted consistently and fairly. An HR Policy Handbook provides the documentary evidence of fair process required in Industrial Court proceedings for unfair dismissal claims under Section 20 of the Industrial Relations Act 1967.
Malaysian female employees are entitled to 98 consecutive days of maternity leave under Section 37 of the Employment Act 1955, as amended by the Employment (Amendment) Act 2022, which increased the entitlement from 60 days. The maternity leave entitlement applies to all female employees covered by the Employment Act 1955, regardless of salary level following the 2022 amendment which removed the previous RM2,000 salary cap. An employee is entitled to maternity allowance (full pay) during maternity leave for a maximum of 5 surviving children. Employers cannot terminate a female employee during her maternity leave period under Section 37(4) of the Employment Act 1955. Male employees are entitled to 7 consecutive days of paternity leave per confinement under the EA 2022 amendment, applicable to all EA-covered employees, for a maximum of 5 confinements.
The Employees Provident Fund (EPF) contribution rates in Malaysia under the Employees Provident Fund Act 1991 are: employer contribution of 13% of the employee's monthly wages for employees earning RM5,000 or below, and 12% for employees earning above RM5,000; employee contribution of 11% for Malaysian citizens and permanent residents, and 5.5% for non-citizens and non-permanent residents. EPF contributions are mandatory for all private sector employees and are deducted and remitted monthly by the employer to the Kumpulan Wang Simpanan Pekerja (KWSP/EPF). The EPF Act 1991 allows employees who are 55 years and above to reduce their contribution rate to 5.5%. Employers who fail to remit EPF contributions on time face penalties under Section 43 of the EPF Act 1991, including a dividend charge on late contributions and prosecution for wilful non-compliance.
The maximum normal working hours in Malaysia under Section 60A of the Employment Act 1955, as amended by the Employment (Amendment) Act 2022, is 45 hours per week — reduced from the previous 48 hours per week, effective 1 January 2023. Employees covered by the Employment Act 1955 cannot be required to work more than 8 hours per day or 45 hours per week as normal hours, excluding meal breaks. Overtime work beyond normal hours is permissible with the employee's consent, subject to a maximum of 104 hours of overtime per month under Section 60A(4) of the Employment Act 1955. Overtime on normal working days is compensated at 1.5 times the hourly rate of pay. Work on rest days is compensated at twice the daily rate, and work on public holidays at three times the daily rate under Sections 60C and 60D of the Employment Act 1955.
A Malaysian employer may dismiss an employee without notice only for gross misconduct — conduct that constitutes a fundamental breach of the employment contract. Summary dismissal for gross misconduct must follow a fair domestic inquiry process under the Industrial Relations Act 1967 and the Code of Conduct for Industrial Harmony 1975 to withstand scrutiny before the Industrial Court. Where an employee is dismissed without following a proper domestic inquiry process, the Industrial Court may award reinstatement or compensation for unfair dismissal under Section 20 of the Industrial Relations Act 1967, with back wages of up to 24 months capped at the applicable statutory maximum. For ordinary termination (not involving misconduct), employers must provide minimum notice under Section 12 of the Employment Act 1955: 4 weeks for employees with 2 or more years but less than 5 years of service, and 6 weeks for employees with 5 or more years of continuous service.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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