Malaysia employers reminded to make all wage payments via bank accounts: MOHR

Any payment of wages in cash or cheque can only be done at the request of the employee themself, and with permission from the Director General of the Department of Labour of Peninsular Malaysia.

Minister of Human Resources, V Sivakumar has reminded employers in Malaysia that all payment of wages to employees – both local and foreign – are to be paid through bank accounts. 

This mandate is in line with the provisions under Section 25 and 25(A) of the Employment Act 1995 [Act 265]. Any payment of wages in cash or cheque can only be done at the request of the employee themself, and with permission from the Director General of the Department of Labour of Peninsular Malaysia, as stated under Section 25A(1) of the same act.

Minister Sivakumar said that any employer found to be making wage payments from means other than a bank account (except if granted permission as stated above) is considered to have committed an offence. If convicted, the employer may be fined up to RM50,000.

Speaking at a recent press conference, this reminder was made following the emergence of an issue of forced labour, wherein the Minister said allegations had risen that a few workers, especially foreign workers, were not paid wages or received late payment on a voluntary basis. It has been established that workers who are not paid, or are paid late, constitute one of the 11 elements of forced labour outlined by the International Labor Organisation (ILO).

"The Ministry of Human Resources (MOHR) has elaborated that employers' compliance with wage payments through the bank will be one of the mechanisms that allow the Government to monitor employer activities. To a certain extent, this may reduce allegations regarding the issue of forced labour," MOHR said in its statement.

The Ministry further highlighted that compliance with the Act in force is crucial for employers, especially for those involved in the export of goods. Employers accused of engaging in forced labour will face sanctions and their products will not be allowed to enter the importing country's market. Beyond that, this will impact the image of the company and also the country on an international stage, he stressed.

Accordingly, MOHR urges employers to continue to comply with all enforced Acts. Enforcement activities by all departments and agencies under MOHR will continue to be implemented in accordance with the legislation under the jurisdiction provided.

Per the statement: "This enforcement needs to be done continuously to ensure that the welfare of the workers is preserved and the harmony of the country's labour continues to be strengthened and to eradicate any forced labour practices in the country."

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