"Wages" in private sector

There are a number of statutory rights related with wages. According to section 18 of Employment Act 1955, contract of service shall specify a wage period not exceeding one month, and if in any contract of service no wage period is specified the wage period shall for the purposes of the contract be deemed to be one month.

Section 19 of the Act is relating to time of payment of wages. According to this section, every employer shall pay to each of his employees not later than the seventh day after the day of any wage period the wages, less lawful deductions, earned by such employee during such wage period: Provided that if the Director General of Human Resource is satisfied that payment within such time is not reasonably practicable, he may, on the application of the employer, extend the time of payment by such number of days as he thinks fit.

Please always remember, according to section 25 of the Act, wages to be paid in legal tender (i.e Ringgit Malaysia):

“(1) Except as otherwise expressly permitted by this Act, the entire amount of the wages earned by, or payable to, any employee in respect of any work done by him shall be actually paid to him in legal tender, and every payment of, or on account of, any such wages made in any other form shall be illegal, null and void.

(2) Every employee shall be entitled to recover in the courts or before the Director General acting under section 69 so much of his wages, exclusive of sums lawfully deducted under Part IV, as shall not have been actually paid to him in legal tender or paid to him by any of the ways under section 25A”.

We shall take note that by virtue of section 25A of Employment Act 1955, payment of wages must be through bank.

“(1) Nothing in subsection 25 (1) shall operate so as to render unlawful or invalid any payment of wages by the employer to the employee with the employee's written consent in any of the following ways -

(a)           payment into an account at a bank or a finance company licensed under the Banking and Financial Institutions Act 1989 [ Act 372 ] in any part of Malaysia being an account in the name of the employee or an account in the name of the employee jointly with one or more other persons;

(b)          (b) payment by cheque made payable to or to the order of the employee.
(2) The consent of the employee under this section may be withdrawn by him at any time by notice in writing given to the employer. Such notice shall take effect at but not before the end of the period of four weeks beginning with the day on which the notice is given.

(3) The consent of the employee to the mode of payment of wages under subsection (1) shall not be unreasonably withheld or, if granted, shall not be unreasonably withdrawn by the employee notwithstanding subsection (2).

(4) Any dispute as to whether an employee has unreasonably withheld or withdrawn his consent to the mode of payment of his wages under subsection (1) shall be referred to the Director General whose decision on the matter shall be final”.

Next, according to section 26 of the Act, conditions restricting place at which, manner in which and person with whom wages paid to be spent, is illegal, and  therefor no employer shall impose any condition in any contract of service as to the place at which, or the manner in which, or the person with whom, any wages paid to the employee are to be expended and any such condition in a contract of service shall be void and of no effect.

Restriction on places at which wages may be paid is stipulated under section 28 of the Act:

“No employer shall pay wages to employees in taverns or other similar establishments or in places of amusement or in shops or stores for the retail sale of merchandise except in the case of employees employed therein”.

According to Section 31, Employment Act 1955, the court shall not authorise payment of the money so attached or garnished (in garnishee proceedings), to the secured creditor until the court shall have ascertained and caused to be paid, the wages of such employee.