Cash Salary Payments Prohibited in Malaysia Without Labour Dept and Employee Approval: Minister of Human Resources
Paying wages in cash in Malaysia is not allowed unless both the employee and the Director-General of the Department of Labour Peninsular Malaysia (JTKSM) approve it to prevent manipulation, according to the Minister of Human Resources on November 15, 2023.
Employers who fail to use bank accounts for wage payments are breaking the law, risking a fine of up to RM50,000 under Sections 25 and 25(A) of the Labour Act 1955 (Act 265).
During a joint inspection at Pasar Borong, Kuala Lumpur, by the Ministry, 19 employers were found paying in cash, out of 34 inspected.
Other infractions observed included breaches in working hours and non-adherence to the Minimum Wages Ordinance.
Such operation’s goal is to address various complaints such as unpaid wages, failure to contribute to the Social Security Organisation (Socso) and the Employees Provident Fund (EPF), and not using bank accounts for salary payments.
The stance of the Ministry remains on stern action against non-compliant employers based on complaints from employees or embassies, aligning with International Labour Organization (ILO) conventions.
Enforcement Statistics:
- 1,654 investigations were initiated from January to October, for salary-related offences, accommodations for workers, and minimum wage orders, resulting in fines exceeding RM4.3 million.
- The investigation documents were initiated in accordance with Act 265, the Workers’ Minimum Standards of Housing and Amenities Act 1990, and the Minimum Wages Order 2022.
- Out of the investigation documents, 357 cases were fined RM391,236, and 775 were compounded RM3,958,500.
