Malaysia now has two separate statutes governing people who work for a business, and they don’t overlap the way many employers assume. The Gig Workers Act 2025 (Act 872) came into force on 31 March 2026, sitting alongside the Employment Act 1955 rather than replacing or extending it.
For a business that hires staff, engages freelancers, or works with delivery riders and platform-based workers, knowing which law applies to which person is no longer optional. This article explains the distinction, why getting it wrong is risky, and what to check in your existing contracts.
Two Laws For Two Very Different Categories of Worker
The Employment Act 1955 has applied to every person under a contract of service since a 2022 amendment removed the old salary threshold that previously excluded higher-earning staff from most of its protections. If someone is your employee, the Act now reaches them regardless of how much they’re paid.
The new Gig Workers Act 2025 covers a different category entirely. It governs a Malaysian citizen or permanent resident who provides services to a business under a service agreement, rather than an employment contract, in exchange for earnings. The Act lists specific categories this is meant to capture, including e-hailing drivers, delivery riders, and non-platform gig work such as creative, media, and care-related services.
Crucially, gig worker status doesn’t put someone under the Employment Act. As one legal commentary on the Bill put it, a gig worker has historically been treated as an independent contractor sitting outside the Employment Act 1955 and the Industrial Relations Act 1967 altogether, and the new Act was built specifically to give that group its own, separate set of protections rather than folding them into existing employment law.
What the Gig Workers Act Actually Requires
For genuine gig workers, the new Act sets out specific obligations a business engaging them now has to meet:
- Every service agreement, written or oral, must set out the rate of earnings, payment method, and treatment of any tips or benefits, with any less favourable term automatically void and replaced by the statutory minimum
- Platform providers must register gig workers under SOCSO’s self-employment scheme and handle social security contributions on their behalf
- Disputes go through an internal grievance process first, then conciliation, and finally a dedicated Gig Workers Tribunal whose decisions are binding
These requirements apply on top of, not instead of, ordinary contract law. A poorly drafted service agreement is still a contract dispute waiting to happen even where the Gig Workers Act’s minimum terms are technically met.
What Still Sits Squarely Under the Employment Act 1955
For anyone who is genuinely your employee, the 2023 amendments to the Employment Act remain the baseline, and they’re more generous than many employers realise. Maximum working hours were cut from 48 to 45 hours per week, maternity leave was extended from 60 to 98 days, and a new statutory 7-day paternity leave entitlement was introduced.
The same amendment also prohibited employment discrimination based on gender, religion, race, and disability across recruitment, employment terms, and termination, giving the Director General of Labour power to investigate complaints — a protection that didn’t exist in any comprehensive form before.
Separately, every employee covered by the Act is also entitled to the current statutory minimum wage of RM1,700 per month in basic salary, a figure that allowances, bonuses, and commissions cannot be used to top up.
How C P Ngoo & Co Can Help
Whether the people working for your business are employees, gig workers, or genuine independent contractors is a question of substance, not labels, and it’s worth getting reviewed before a dispute forces the question. Under our Corporate and Commercial practice, we draft provision-of-services contracts as well as employment-adjacent agreements, and can help structure these so the agreement reflects the actual working relationship and the obligations that go with it.
Where a working relationship turns into a dispute, our Litigation practice handles contractual disputes generally, including disagreements over how a service or employment relationship was actually structured and what each party was owed.