Sabah and Sarawak: the Labour Ordinances, not the Employment Act

Search “Malaysia employment law” and every result you get describes Peninsular Malaysia and says so nowhere. That silence has a cost: a national HR policy written against the Employment Act 1955 is simply the wrong statute for anyone employed in Kota Kinabalu, Sandakan, Kuching or Miri.

East Malaysia has always run on its own labour statutes. What changed recently is that those statutes stopped being twenty years out of date.

Two statutes, two departments

	Peninsular Malaysia	Sabah	Sarawak
Statute	Employment Act 1955 (Act 265)	Labour Ordinance (Sabah Cap. 67)	Labour Ordinance (Sarawak Cap. 76)
Recent amendment	Act A1651, in force 1 Jan 2023	Act A1753, in force 1 May 2025	Act A1754, in force 1 May 2025
Enforcing body	Jabatan Tenaga Kerja Semenanjung Malaysia	Jabatan Tenaga Kerja Negeri Sabah	Jabatan Tenaga Kerja Sarawak
Official site	jtksm.mohr.gov.my	jtksabah.gov.my	jtkswk.gov.my

The statutory officer differs too. Act 265 speaks of the Director General of Labour; the Ordinances speak of the Director. Approvals, permissions and complaints under the Ordinances go to the state department. Filing a Sabah matter with JTKSM does not start the clock.

What does not differ: EPF, SOCSO, EIS, PCB and the HRD Corp levy are federal schemes of nationwide application. The state-specific layer is labour standards only.

What the 2025 amendments did

Both Ordinances had drifted badly. Sabah’s coverage was still capped at employees earning RM2,500 and below; Sarawak’s was similarly wage-limited. The 2022 peninsular reform opened a three-year gap in which the same employer, running the same job, owed materially different entitlements depending on which side of the South China Sea the work happened.

The Labour Ordinance of Sabah (Amendment) Act 2025 (Act A1753) and the Labour Ordinance of Sarawak (Amendment) Act 2025 (Act A1754) closed most of it. Act A1754 received Royal Assent on 20 March 2025 and was published in the Gazette on 14 April 2025. Both Acts left commencement to ministerial notification, and both were brought into operation on 1 May 2025 — except Part IVA, the special provisions relating to minimum standards of housing, accommodation and employee amenities.

The headline harmonisations, now common to all three jurisdictions:

• coverage extended to all employees under a contract of service, replacing the wage-capped model
• the working week reduced to 45 hours
• maternity leave increased to 98 consecutive days
• seven consecutive days of paid paternity leave introduced
• flexible working arrangement provisions introduced
• sexual harassment provisions introduced, tracking the Part XVA structure
• a forced labour offence introduced
• anti-discrimination provisions introduced

Act A1754 also did something quietly significant: a general amendment substituting employee for worker and domestic employee for domestic servant wherever they appear. If you are working from an older Sarawak text, the vocabulary will not match.

Where the ordinances still diverge

This is the part that gets glossed over as “now the same as the peninsula”. They are aligned in policy, not identical in drafting, and the drafting is what you have to comply with.

Sarawak’s amendment replaced the Schedule entirely with a new First Schedule and inserted new Second and Third Schedules. The new First Schedule paragraph 1 is the familiar universal limb — any person who has entered into a contract of service. Paragraph 2 then disapplies, for a person whose wages exceeds four thousand ringgit a month:

• the definitions of normal hours of work and overtime in section 2
• subsections (6), (7), (8), (9) and (10) of section 104
• subsection (6) of section 105
• subsections (2), (3), (4) and (5) of section 105c
• section 105f
• paragraph (r) of subsection (2) of section 130o

Compare the Employment Act’s paragraph 1A, which disapplies ss.60(3), 60A(3), 60C(2A), 60D(3), 60D(4) and s.60J. The threshold figure is identical. The mechanism is not: Sarawak switches off the definitions of normal hours and overtime as well as the operative subsections, and reaches into s.130o, which has no Act 265 counterpart. You cannot translate an Act 265 compliance matrix into Sarawak by find-and-replace.

Sarawak’s new Third Schedule is a list of hazardous work — physical hazards including work at height, extreme temperature, excessive noise or vibration, radioactive substances and ionising radiation; chemical hazards under the Occupational Safety and Health (Classification, Labelling and Safety Data Sheet of Hazardous Chemicals) Regulations 2013 and the Environmental Quality (Scheduled Wastes) Regulations 2005; biological hazards; and construction, timber, offshore and near-water work. There is no equivalent schedule in Act 265.

What to do about Part IVA

Part IVA — minimum standards for housing, accommodation and employee amenities — was deliberately held back from the 1 May 2025 commencement in both states. Employers who provide accommodation in Sabah or Sarawak should treat its status as a live question and confirm with the state department rather than assuming either that it is in force or that it never will be. On the peninsula the equivalent regime sits in the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446), a federal statute.

Common mistakes

Writing one handbook against Act 265. Every entitlement clause needs a Sabah and Sarawak column, or a jurisdiction clause that points to the right Ordinance.

Assuming full harmonisation. Policy converged on 1 May 2025. Section numbers, schedules and the RM4,000 carve-out lists did not.

Filing with JTKSM. Approvals under the Ordinances are the Director’s, at the state department.

Using a pre-2025 Ordinance text. The consolidated Sarawak reprint published by the Attorney General’s Chambers is as at 1 October 2024 — that is before Act A1754 commenced. Read it together with the amendment Act, not instead of it.

Assuming Part IVA is live. It was excepted from the 1 May 2025 commencement.

Treating Labuan as Sabah. Labuan is a Federal Territory; check which regime applies to a given Labuan engagement rather than assuming the Sabah Ordinance follows the geography.

What’s next

Pull your headcount by work location. For every employee in Sabah or Sarawak, re-check overtime eligibility, maternity and paternity entitlement and the flexible-working procedure against the relevant Ordinance rather than against Act 265. Then confirm the current commencement status of Part IVA with JTK Sabah or JTK Sarawak directly — that is the one moving piece.