The law provides for limited freedom of association and for certain categories of workers to form and join trade unions, subject to a variety of legal and practical restrictions. The law provides for the rights to strike and to bargain collectively, but both were severely restricted. The law prohibits employers from interfering with trade union activities, including union formation. It prohibits employers from retaliating against workers for legal union activities and requires reinstatement of workers fired for union activity. The nationwide January-August state of emergency restricted freedom of assembly and prohibited worker strikes and protests.

The law prohibits defense and police officials and retired or dismissed workers from joining a union. The law also restricts the formation of unions of workers in similar trades, occupations, or industries. Foreign workers may join a trade union but may not hold union office unless they obtain permission from the Ministry of Human Resources. In view of the absence of a direct employment relationship with owners of a workplace, subcontracted workers may not form a union and may not negotiate or benefit from collective bargaining agreements.

The director general of trade unions and the minister of human resources may refuse to register or withdraw registration from some unions without judicial oversight. The time needed for a union to be recognized remained long and unpredictable. Union officials expressed frustration about delays. If a union’s recognition request was approved, the employer sometimes challenged the decision in court, leading to multiyear delays in recognizing unions.

Most private-sector workers have the right to bargain collectively, although these negotiations may not include matters of transfer, promotion, appointments, dismissal, or reinstatement. The law restricts collective bargaining in “pioneer” industries the government has identified as growth priorities, including various high-technology fields. Trade unions in companies granted pioneer status may not negotiate terms and conditions that are more favorable than the provisions stipulated in labor law unless approved by the minister of human resources. Public-sector workers have some collective bargaining rights, although some could only express opinions on wages and working conditions instead of actively negotiating. Long delays continued in the treatment of union claims to obtain recognition for collective bargaining purposes. The government also had the right to compel arbitration in the case of failed collective bargaining negotiations.

Private-sector strikes were severely restricted. The law requires two-thirds of the members of a registered trade union to vote for a strike through a secret ballot, and a report must be submitted to the director general of trade unions to approve the strike as legal. Workers who strike without the consent of the director general of trade unions are liable to a fine of 2,000 ringgit ($480), imprisonment for up to one year, or both. The law prohibits general strikes, and trade unions may not strike over disputes related to trade-union registration or illegal dismissals. Workers may not strike in a broad range of industries deemed “essential,” nor may they hold strikes when a dispute is under consideration by the Industrial Court. Union officials claimed legal requirements for strikes were almost impossible to meet; the last major strike occurred in 1962.

The government did not effectively enforce laws prohibiting employers from seeking retribution for legal union activities and requiring reinstatement of workers fired for trade union activity. Penalties included fines but were seldom assessed and were not commensurate with those under other laws involving denials of civil rights, such as discrimination.

In July police opened investigations into a protest by contract doctors demanding better job security. The protest took place amid threats of disciplinary action by hospital administrations and heavy police presence at several major hospitals nationwide. Doctors at the Malaysia Agro Exposition Park Serdang COVID-19 Center canceled their walkout after police allegedly threatened them with arrest. Opposition lawmakers slammed then minister of health Adham Baba for breaking his promise that no action would be taken against doctors who participated in the strike. Member of parliament Saifuddin Nasution Ismail stated on July 28, “the doctors were questioned from midnight till 4 a.m., this is a form of intimidation” and added that the physicians’ lawyer had been prevented from representing his clients.

Freedom of association and collective bargaining were not fully respected. National-level unions are prohibited; the government allows three regional territorial federations of unions – for peninsular Malaysia, and for the states of Sabah and Sarawak – to operate. They exercised many of the responsibilities of national-level labor unions, although they could not bargain on behalf of local unions. The Malaysian Trades Union Congress is a registered “society” of trade unions in both the private and government sectors that does not have the right to bargain collectively or strike but may provide technical support to affiliated members.

Some workers’ organizations were independent of government, political parties, and employers, but employer-dominated or “yellow” unions were reportedly a concern.

In some instances companies reportedly harassed leaders of unions that sought recognition. Some trade unions reported the government detained or restricted the movement of some union members under laws allowing temporary detention without charging the detainee with a crime. Trade unions asserted some workers had wages withheld or were terminated because of union-related activity.

The law prohibits and criminalizes all forms of forced or compulsory labor. Five agencies, including the Department of Labor of the Ministry of Human Resources, have enforcement powers under the law, but their officers performed a variety of functions and did not always actively search for indications of forced labor. NGOs continued to criticize the lack of resources dedicated to enforcement of the law.

The government did not effectively enforce laws prohibiting forced labor in some cases, and large fines as penalties were not commensurate with those for other analogous serious crimes, such as kidnapping.

In February General Mills issued global “no buy orders” from palm oil producers FGV and Sime Darby Plantation due to forced labor claims. Other buyers requested suppliers to reduce or exclude FGV and Sime Darby products for supplies entering numerous countries.

In June the Malaysia Stock Exchange removed Top Glove from its responsible investment indexes based on allegations of forced labor. Observers reported occurrences of forced labor or conditions indicative of forced labor in plantation agriculture, electronics factories, garment production, rubber-product industries, and domestic service among both adults and children (also see section 7.c.).

Employers, employment agents, and labor recruiters subjected some migrants to forced labor or debt bondage. Many companies hired foreign workers using recruiting or outsourcing companies, creating uncertainty about the legal relationship between the worker, the outsourcing company, and the owner of the workplace, making workers more vulnerable to exploitation and complicating dispute resolution. Labor union representatives noted that recruiting agents in the countries of origin and locally sometimes imposed high fees, making migrant workers vulnerable to debt bondage. A July study by Newcastle University of 1,500 mainly migrant workers found that the following forced labor indicators in the country had worsened during the pandemic: restrictions on movement, isolation, abusive working and living conditions, and excessive overtime. Other indicators, such as abuse of vulnerability, deception, physical and sexual violence, intimidation, and retention of identity documents, had remained at the same level as before the pandemic.

The Newcastle research found that 85 percent of workers reported paying recruitment fees and 43 percent reported taking out loans averaging more than $2,000 to cover the costs, which took nearly a year on average to repay. Nearly a third reported that their recruitment agency threatened them not to speak about being charged the fees.

During the year several medical glove manufacturers announced repayments to workers based on forced labor practices. By April, Top Glove had reimbursed 150 million ringgit ($36 million) to approximately 13,000 existing and eligible former workers. Kossan completed repaying more than 5,500 workers a total 54 million ringgit ($13 million) with a final transfer of 24 million ringgit ($5.8 million) at the end of June. Hartalega finished its reimbursements process of 41 million ringgit ($9.8 million) to existing workers who joined the firm prior to April 2019. A Hartalega spokesperson announced in August the firm had fully reimbursed all migrant workers who were then employed at Hartalega and was continuing to reimburse eligible former workers. Supermax had repaid nearly 1,750 workers by June and stated it had allocated 23 million ringgit ($5.5 million), including remediation payment to contract workers.

The trial of former deputy prime minister Zahid Hamidi for his role in a fraudulent scheme involving hundreds of thousands of Nepali workers seeking jobs in the country continued as of September. Zahid faced charges filed in 2018 of corruption, money laundering, and taking bribes totaling three million ringgit ($720,000) from a company that ran a visa center for the workers, who paid tenfold higher costs for visa services and medical tests over a five-year period without receiving additional protections or benefits.

Nonpayment of wages remained a concern. Passport confiscation by employers increased migrant workers’ vulnerability to forced labor; the practice was illegal but widespread and generally went unpunished. Migrant workers without access to their passports were more vulnerable to harsh working conditions, lower wages than promised, unexpected wage deductions, and poor housing. NGOs reported that agents or employers in some cases drafted contracts that included a provision for employees to sign over the right to hold their passports to the employer or an agent. Some employers and migrant workers reported that workers sometimes requested employers keep their passports, since replacing lost or stolen passports could cost several months’ wages and leave foreign workers open to questions about their legal status.

Also see the Department of State’s Trafficking in Persons Report at https://www.state.gov/trafficking-in-persons-report/.

The law prohibits all of the worst forms of child labor. The law prohibits the employment of children younger than 15 but permits some exceptions, such as light work in a family enterprise, work in public entertainment, work performed for the government in a school or in training institutions, or work as an approved apprentice. There is no minimum age for engaging in light work. For children between ages 14 and 18, there was no list clarifying specific occupations or sectors considered hazardous and therefore prohibited.

The government did not effectively enforce laws prohibiting child labor. Those found contravening child labor laws faced penalties that were not commensurate with those for other analogous serious crimes, such as kidnapping.

Child labor occurred in some family businesses. Child labor in urban areas was common in the informal economy, including family food businesses and night markets, and in small-scale industry. Child labor was also evident among migrant domestic workers.

NGOs reported that stateless children in Sabah State were especially vulnerable to labor exploitation in palm oil production, forced begging, and work in service industries, including restaurants. Although the National Union of Plantation Workers reported it was rare to find children involved in plantation work in peninsular Malaysia, others reported instances of child labor on palm oil plantations across the country. Child sex trafficking also occurred (see section 6, Children).

Also see the Department of Labor’s List of Goods Produced by Child Labor or Forced Labor at https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods .

d. Discrimination with Respect to Employment and Occupation

The law does not prohibit discrimination with respect to race, religion, national origin, color, sex, ethnicity, disability, age, sexual orientation, HIV or AIDS status, or refugee status in employment and hiring; the director general of labor may investigate discrimination in the terms and conditions of employment for both foreign and local employees. The law prohibits women from working underground, such as in mines, and restricts employers from requiring female employees to work in industrial or agricultural work between 10 p.m. and 5 a.m. or to commence work for the day without having 11 consecutive hours of rest since the end of the last work period.

The director general may issue necessary directives to an employer to resolve allegations of discrimination in employment, although there were no penalties under the law for such discrimination and thus penalties were not commensurate with laws related to civil rights, such as election interference.

Employers are obligated to inquire into most sexual harassment complaints in a prescribed manner. Advocacy groups such as the Association of Women Lawyers stated these provisions were not comprehensive enough to provide adequate help to victims.

Discrimination in employment and occupation occurred with respect to women; members of national, racial, and ethnic minorities; and persons with disabilities. A code of practice guides all government agencies, employers, employee associations, employees, and others with respect to placement of persons with disabilities in private-sector jobs. Disability-rights NGOs reported that employers were reluctant to hire persons with disabilities. A regulation reserves 1 percent of public-sector jobs for persons with disabilities.

Migrant workers must undergo mandatory testing for more than 16 illnesses as well as pregnancy. Employers may immediately deport pregnant or ill workers. Migrant workers also faced employment discrimination (see sections 7.b. and 7.e.). Employers were unilaterally able to terminate work permits, subjecting migrant workers to immediate deportation.

Women experienced some economic discrimination in access to employment. Employers routinely asked women their marital status during job interviews. The Association of Women Lawyers advocated for passage of a separate sexual harassment bill requiring employers to formulate sexual harassment policies.

The government reserved large quotas for the bumiputra majority for positions in the federal civil service as well as for vocational permits and licenses in a wide range of industries, which greatly reduced economic opportunity for minority groups (see section 6, Systemic Racial or Ethnic Violence and Discrimination).

Wage and Hour Laws: The minimum wage applied to both citizen and foreign workers, except for those in domestic service and the gig economy (see section 7.e., Informal Sector). Minimum wage rates varied according to location and were less than Ministry of Finance-published poverty income levels in Sabah and Sarawak states.

Working hours may not exceed eight hours per day or 48 hours per week, unless workers receive overtime pay. The director general of the Ministry of Labor may grant exceptions if there are special circumstances making the extra hours necessary.

The law protects foreign domestic workers only regarding wages and contract termination. The law excludes them from provisions that stipulate one rest day per week, an eight-hour workday, and a 48-hour workweek. Instead, bilateral agreements or memoranda of understanding between the government and some source countries for migrant workers include provisions for rest periods, compensation, and other conditions of employment for migrant domestic workers, including prohibitions on passport retention.

Occupational Safety and Health: Occupational health and safety laws cover all sectors of the economy except the maritime sector and the armed forces. The law requires workers to use safety equipment and cooperate with employers to create a safe, healthy workplace, but it does not specify a right to remove oneself from a hazardous or dangerous situation without penalty. Laws on worker’s compensation cover both local and migrant workers. In June the government expanded social security coverage to local and migrant domestic workers.

The National Occupational Safety and Health Council – composed of workers, employers, and government representatives – creates and coordinates implementation of occupational health and safety measures. It requires employers to identify risks and take precautions, including providing safety training to workers, and compels companies with more than 40 workers to establish joint management-employee safety committees.

According to Department of Occupational Safety and Health statistics, as of July, 111 workers died, 3,668 acquired a nonpermanent disability, and 140 acquired permanent disability in work-related incidents.

The Department of Labor of the Ministry of Human Resources enforces wage, working condition, and occupational safety and health standards. The government did not effectively enforce the law. The number of labor enforcement officers was insufficient to enforce compliance. Department of Labor officials reported they sought to conduct labor inspections as frequently as possible. Nevertheless, many businesses could operate for years without an inspection. Inspectors have the authority to conduct unannounced inspections and initiate sanctions.

Penalties for employers who fail to follow the law begin with a fine assessed per employee and may rise to imprisonment. Employers may be required to pay back wages plus the fine. If they refuse to comply, employers face additional fines for each day that wages are not paid. Employers or employees who violate occupational health and safety laws are subject to fines, imprisonment, or both. Penalties for violations were not commensurate with those for similar crimes.

Employers did not respect laws on wages and working hours. The Malaysian Trades Union Congress reported that 12-, 14-, and 18-hour days were common in food and other service industries. In June a court ordered Goodyear Malaysia Berhad to provide 185 migrant workers more than 5 million ringgit ($1.2 million) in unpaid wages, shift allowances, annual bonuses, and pay increases. The lawyer representing the migrant workers submitted pay slips to the court showing some migrants worked up to 229 hours a month in overtime, exceeding the legal limit of 104 hours.

In February the government introduced the Worker’s Minimum Standards of Housing and Amenities Act as an emergency ordinance during the state of emergency compelling employers and centralized accommodation providers to provide lodging with sufficient living space and amenities for migrant workers to effectively control the spread of COVID-19. The legislation expanded this authority to include housing and local government agencies, the Ministry of Trade and Industry, and the Ministry of Domestic Trade and Consumer Affairs in order to enforce fines and penalties up to 200,000 ringgit ($48,000), three years’ jail time, or both, against employers that failed to adhere to regulations.

In September Minister of Human Resources Saravanan announced that the government had found 49 workers’ hostels “unfit for human habitation” and ordered them closed, causing the relocation of 2,942 workers. As of August 24, the ministry had inspected 23,993 employers and 129,668 staff quarters covering the accommodation of 804,204 migrant workers and close to 1.2 million workers. The violations included “failure to comply with building capacity, operating without permission, failure to provide entry and exit route and nonadherence to social distancing.”

Migrant workers often worked in sectors where violations were common. They performed hazardous duties and had no meaningful access to legal counsel in cases of contract violations and abuse. Some workers alleged their employers subjected them to inhuman living conditions and physically assaulted them. Employers of domestic workers sometimes failed to honor the terms of employment and subjected workers to abuse. Employers reportedly restricted workers’ movement and use of mobile telephones; provided substandard food; did not provide sufficient time off; sexually assaulted workers; and harassed and threatened workers, including with deportation.

Informal Sector: As of 2019 more than one million workers were considered to be in the nonagricultural informal sector. This included any enterprise not registered with the Companies Commission of Malaysia or other professional body and included more than one million self-employed or micro businesses, such as in-home workers, street vendors, and small workshops. More than half of informal workers were male, and more than three-quarters were in the cities.

Reports indicated that COVID-19 led to an increase in the number of self-employed “gig” employees. Estimates were as high as 30 percent of the workforce. There are no specific regulations, laws, or guidelines to protect the welfare of gig workers, except for the provisions under the Self-Employment Social Security Act 2017 that require self-employed individuals to register and contribute.