Public Holiday Pay Rules in Malaysia

Section 60D of the Employment Act 1955 entitles employees to paid holidays on 11 gazetted public holidays in a calendar year, plus any day declared a public holiday under section 8 of the Holidays Act 1951. Of the 11, five are fixed by law and cannot be swapped out; the employer chooses the remaining six from the state's gazetted list and should notify employees at the start of the year.

• Compulsory: National Day (31 August)
• Compulsory: Birthday of the Yang di-Pertuan Agong
• Compulsory: Birthday of the Ruler or Yang di-Pertua Negeri of the state (or Federal Territory Day)
• Compulsory: Labour Day (1 May)
• Compulsory: Malaysia Day (16 September)
• Plus 6 more holidays chosen by the employer from the state's gazetted list (commonly Chinese New Year, Hari Raya Aidilfitri, Hari Raya Aidiladha, Deepavali, Christmas, Wesak and others)

If any of the paid public holidays falls on a rest day (typically Sunday), the working day immediately following the rest day becomes the paid holiday in substitution. The same principle applies where a holiday falls within a period of annual leave, sick leave or temporary disablement — the employer must grant another day as a paid holiday in substitution.

Employers may also, by agreement with the employee, substitute any of the gazetted holidays for another day. This is common in retail and F&B where trading continues through festive dates and the paid holiday is taken on a quieter day instead.

For a monthly-rated employee, the holiday pay itself is already built into the monthly salary. If the employee is required to work on a paid public holiday, section 60D(3) requires payment of 2 extra days' wages at the ordinary rate of pay (ORP), regardless of whether the hours worked are less than the normal hours of work. Overtime hours beyond normal hours on a public holiday are paid at not less than 3 times the hourly ORP.

ORP is derived by the Employment Act formula: daily rate = monthly wages divided by 26; hourly rate = daily rate divided by normal hours of work (typically 8). These monetary provisions apply to employees earning RM4,000 per month and below, plus manual workers regardless of wages; for staff above that threshold, holiday work compensation follows the employment contract.

A monthly-rated retail assistant earning RM2,600 works a full 8-hour shift plus 2 hours of overtime on Labour Day (1 May), a compulsory public holiday.

From time to time the federal or a state government declares an ad-hoc public holiday under the Holidays Act 1951 — for example special holidays following national sporting wins or elections. A holiday declared under section 8 of the Holidays Act is a paid public holiday for Employment Act employees in addition to the 11 gazetted days.

For such declared holidays, the Act allows the employer to require the employee to work, but the employer must either pay the public holiday work rates or grant another day off in substitution. Businesses that cannot close at short notice typically handle ad-hoc holidays through substitution days.

Part-timers covered by the Employment (Part-Time Employees) Regulations 2010 — those working 30% to 70% of a comparable full-timer's hours — are entitled to a minimum of 6 paid public holidays per year, plus pro-rated treatment of other entitlements. A part-timer required to work on one of their paid public holidays should be compensated at premium rates in line with the Regulations.

For hourly-rated part-timers, holiday pay for an unworked paid holiday is normally computed at the hourly rate multiplied by the hours the part-timer would ordinarily have worked that day.

Public holiday pay mistakes usually happen because the holiday calendar, the attendance record and the payroll calculation live in different places. An HR system such as staffs.id keeps a company calendar of gazetted and employer-declared holidays per branch and state, matches clock-in and clock-out records against it, and automatically applies the 2 extra days' wages and 3 times overtime rate for monthly-rated staff, or the correct multiplier for hourly part-timers, in the payroll run.

Special pay days such as employer-declared double or triple pay dates can also be configured on the same calendar with per-staff entitlement, so festive trading pay is computed consistently with a full audit trail.