.webp){kind=small}
How to hire remote employees in
Want to hire someone in Malaysia? Excellent. But, no matter where you’re from, labor laws in Malaysia are different from those in your home country (unless you’re from Malaysia, of course). Read on to learn about your options, plus as the easiest way to make remote hires in Malaysia.
If you want to successfully hire in
Malaysia
, you have two options:
Laws about hiring contractors are significantly more simple in
Malaysia
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Malaysia
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Malaysia
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Malaysia
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Malaysia
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Malaysia than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Malaysia.
PTO is calculated by the:
There are 6 compulsory public holidays and 10 optional public holidays (employer should choose at least 5 of these but it is common for offices to close on all).
State day is a compulsory public holiday and the day varies from state to state. All other holidays are national.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
Female employees are covered in full by the employer for a least 90 days if they have been employed in the last four months and have worked for the same employer for at least 90 days in the 9 months prior to childbirth.
There are no provisions in the law regarding paternity leave for the private sector, however, in the public sector, fathers are entitled to 7-14 days.
None.
None.
None.
None.
Employees can be dismissed for misconduct or poor work performance. Termination is subject to employee challenge for unfair dismissal.
It is recommended that proper procedure is followed (warning, time and guidance to improve performance) in order to reduce the likelihood of an unfair dismissal claim.
The notice period in Malaysia is:
No set amount but should be equitable between employee and employer.
Minimum termination benefits for employees who are fired for reasons not connected to their conduct are as follows:
Probation is optional. The common practice is to have 1-3 months probations.
The Employment Act does not distinguish between employees on probation and permanent employees.
Working hours are limited to 48 hours per week. The most common office practice is 45 hours per week (9 am-6 pm, Mon-Fri)
The minimum guideline for overtime pay in the Employment Act is:
The Employment Act only covers manual workers and non-manual workers with a monthly salary that does not exceed RM 2,000. However, these guidelines are often used as guidance in Common Law cases for other employees.
.png)
Book a demo to get started.
