# The Gig Workers Act 2025: a classification statute with a social-security bolt-on

> Act 872 creates a third legal category between employee and contractor, with its own tribunal, its own dispute process and a mandatory platform deduction.

- Category: employment
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/employment/gig-workers-act-2025

---

Act 872 is being covered as a social-security story: platforms must now deduct SOCSO.
That is the smallest part of it. The larger effect is that Malaysia now has a **statutory
third category** between employee and independent contractor — and the statute defines
that category by telling you what it is *not*.

## What is a service agreement?

Section 2 defines it as any agreement, oral or written, express or implied, between a
contracting entity and a gig worker for the provision of a service in Malaysia in
exchange for earnings — *but does not include* a **contract of service** as defined under
the Employment Act 1955, the Labour Ordinance of Sabah (Cap. 67), the Labour Ordinance of
Sarawak (Cap. 76) or the Occupational Safety and Health Act 1994, nor a **contract of
employment** under the Industrial Relations Act 1967.

Read that again from a compliance angle. Act 872 does not decide the classification
question — it **presupposes** it. If the engagement is in substance a contract of
service, Act 872 falls away and the full employment stack applies: EA entitlements, EPF,
SOCSO as an employer, PCB, and s.20 unfair dismissal exposure. Signing an Act 872 service
agreement does not immunise a relationship that a court would characterise as employment.

What the Act does add is a floor of rights that used to be pure contract, and a forum to
enforce them.

## Who is a gig worker?

Under s.2 a gig worker is an individual who:

1. is a **citizen or permanent resident of Malaysia**;
2. enters into a service agreement either with a **platform provider** for any service,
   or with a **non-platform contracting entity** for a service specified in the
   **Schedule**; and
3. receives **earnings** for the service.

The citizenship requirement is doing real work — a foreign national delivering for a
platform in Malaysia is outside the definition.

A **platform provider** is *any digital intermediary system provider who connects the
service by a gig worker to a service user*. A **contracting entity** is broader: an
individual, any person or body incorporated or registered under any written law, or a
platform provider, who engages a gig worker under a service agreement.

The Schedule, which applies to non-platform engagements, covers acting; filming
activities; music-related activities (singer, musician, composer, lyricist); aesthetic
work (make-up artist, hair stylist, stylist); translation (sign interpreter, interpreter
or translator, transcriber); journalism (journalist, stringer); prenatal and postnatal
care; palliative, elderly and rehabilitation care; and photography and videography. The
Minister may amend it under s.110.

## What rights does Part III create?

Part III gives the gig worker rights to earnings (s.11), restrictions on deduction of
earnings, tips and gratuities (s.12), a right to an **earnings slip** (s.13), protection
around **deactivation** under a service agreement (s.14), **priority of earnings over
other debts** (s.15), and a right to join, participate in or establish a **gig workers'
association** (s.10). Section 9 prohibits certain acts by the contracting entity, and s.16
sets out its duties.

None of this is employment law. It is closer to a fair-dealing code for a commercial
relationship with a structural power imbalance.

## How are disputes resolved?

The route is sequential, and it starts inside the platform.

1. **Internal grievance mechanism** (s.17) — the contracting entity must provide one in
   the service agreement.
2. **Conciliation** (ss.18–21) before a Conciliator, or by the Minister under s.20.
   Non-compliance with settlement terms is dealt with under s.21.
3. **Gig Workers Tribunal** (Part V) — the Conciliator or the Minister refers the dispute.

Section 33(1) gives the Tribunal jurisdiction over any dispute referred to it by the
Conciliator or the Minister, with power to grant any award it thinks just and
appropriate, and s.33(3) allows a complaint to include consequential loss or damages.

Section 33(2) is the important limit: the Tribunal has **no jurisdiction over offences
under the Act, and none over any Part VIII matter**. Social security disputes run through
s.94 and the Self-Employment Social Security Act 2017 instead.

The Tribunal sits as a single member — the President, Deputy President, or a member
selected by the President (s.34(1)). The **Gig Workers (Gig Workers Tribunal) Regulations
2026**, P.U.(A) 144, gazetted 30 March 2026, set the procedure and came into force on
31 March 2026. The Ministry of Human Resources states that parties may not be represented
by lawyers, and that an appeal against an award lies to the **High Court within fourteen
days**. Section 45 makes failure to comply with an award an offence.

## What is the social security duty?

Part VIII applies **only to a contracting entity who is a platform provider** (s.81).

Section 83 lists the duties: submit gig worker information to PERKESO; ensure the worker
is registered under the **Self-Employment Social Security Scheme** under Act 789; make the
deduction from earnings and contribute on the worker's behalf; implement mandatory
deduction at the prescribed percentage; notify the worker to pay any shortfall below the
minimum monthly contribution; and notify the worker to select a plan where the deduction
exceeds the minimum.

The Ministry of Human Resources FAQ states the deduction rate **per transaction is set for
the time being at 1.25%**, with the wording indicating it is a current setting rather than
a permanent statutory figure. Deductions flow to PERKESO through an integration between
the platform's digital intermediary system and PERKESO's.

The underlying Act 789 plans, as published in the same FAQ:

| Plan | Insured monthly earnings | Monthly contribution | Annual contribution |
| --- | --- | --- | --- |
| 1 | RM1,050 | RM13.10 | RM157.20 |
| 2 | RM1,550 | RM19.40 | RM232.80 |
| 3 | RM2,950 | RM36.90 | RM442.80 |
| 4 | RM3,950 | RM49.40 | RM592.80 |

Where a worker serves several platforms, **every platform deducts** on its own
transactions (FAQ Q124). There is no statutory age limit for registration under Act 789
for this purpose.

## Commission, council, or neither?

Worth being precise, because the reporting is loose. Act 872 establishes a **Gig Workers
Tribunal** (Part V) and a **Consultative Council** (Part VI, *Majlis Perundingan*). It
does **not** establish a commission. The Malaysian Gig Economy Commission (SEGIM) reported
in the press is an administrative body, and its legal basis is not Act 872 — treat claims
about its powers with care until you can point to the instrument that created it.

## Common mistakes

**Assuming Act 872 settles classification.** It defines itself out of the way of the
contract-of-service tests. A mislabelled employee is still an employee.

**Applying the 1.25% deduction as a general freelancer rule.** Part VIII binds platform
providers only. Non-platform contracting entities under the Schedule have Part III duties
but no deduction duty.

**Treating the deduction as an employer contribution.** It is a deduction *from the gig
worker's earnings*, remitted on the worker's behalf — not an employer-funded contribution
in the SOCSO Category 1 sense.

**Ignoring the shortfall notification.** If the 1.25% does not reach the Act 789 minimum
for the month, s.83(e) puts a positive notification duty on the platform.

**Engaging non-citizens as gig workers.** The s.2 definition requires citizenship or
permanent residence.

**Expecting the Tribunal to hear contribution disputes.** Section 33(2) excludes all Part
VIII matters.

## What's next

If you operate a platform, the immediate work is the PERKESO system integration, the
earnings-slip requirement under s.13, and a documented internal grievance mechanism under
s.17 — that last one is a precondition to the whole dispute pathway and is cheap to get
wrong. If you engage freelancers off-platform, check whether the service falls in the
Schedule, and separately re-run the contract-of-service test, because that is the question
Act 872 leaves exactly where it found it.

## Sources

- Gig Workers Act 2025 (Act 872) — https://www.mohr.gov.my/aktapekerjagig2025/assets/documents/Act%20872.pdf (Ministry of Human Resources)
- Akta Pekerja Gig 2025 (Akta 872) — Soalan-Soalan Lazim — https://www.mohr.gov.my/aktapekerjagig2025/assets/documents/faq.pdf (Ministry of Human Resources)
- Gig Workers (Gig Workers Tribunal) Regulations 2026, P.U.(A) 144 — https://www.jtksabah.gov.my/utama/wp-content/uploads/2026/04/PUA144_2026.pdf (Attorney General's Chambers)
- Gig Workers (Compounding of Offences) Regulations 2026, P.U.(A) 145 — https://dosh.gov.my/wp-content/uploads/2026/06/Peraturan-Peraturan-Pekerja-Gig-Pengkompaunan-Kesalahan-2026-P.U.-A-145_2026-1.pdf (Attorney General's Chambers)

---
Source of truth: https://github.com/negaraku-md/NegaraKu.md
License: CC BY-SA 4.0