Malaysia’s Landmark Gig Workers Act Coming Into Effect

The Malaysian government has announced that the Gig Workers Act 2025 will come into operation at the end of March 2026,?once certain panels and councils to be established under the Act have been finalised.

The Act aims to protect the rights of about 1.2 million gig workers in Malaysia, to place new duties on contracting entities, and to regulate terms and conditions for service agreements entered into between the contracting entity and the gig worker. The Act also provides a dispute resolution mechanism and establishes a Consultative Council and a Gig Workers Tribunal, as discussed below. 

The new law will have significant implications for gig workers and businesses in Malaysia that engage gig workers.

Key Features of the Act

Under the Act, a ‘gig worker’ means an individual who is a citizen or permanent resident of Malaysia, who enters into a service agreement with a contracting entity for the performance of services and receives earnings for the service. This includes services performed for a platform provider, as well as certain other specified services (e.g. entertainment, translation, journalism, prenatal and postnatal care, elderly and rehabilitation care, and photography and videography).

A ‘platform provider’ is any digital intermediary system provider who connects the service by a gig worker to a service user.?A ‘service agreement’ is defined broadly as any agreement, whether oral or written, to provide a service in Malaysia in exchange for earnings, but which is not an employment contract.

The Act requires that every service agreement entered into between a contracting entity and a gig worker must include certain basic terms and conditions. These include the rate and details of the gig worker’s earnings, how those earnings will be paid, and the treatment of any benefits, tips or gratuities earned by the gig worker. The Act further provides that any less favourable terms than those prescribed in the Act are void and will be substituted with the terms as provided under the Act.

Rights of gig workers under the Act

The Act provides certain important new rights to gig workers, including:

• to be informed of the rate and details of earnings?before?the gig worker agrees to perform the service;

• to receive earnings within the agreed period (or where this is not stipulated in the service agreement, within seven days from the date of completion of service);

• to be consulted and informed if there is any variation of terms;

• to enter into any agreement with other entities;

• to not be discriminated against in relation to conditions of work, assignment of service or payment of earnings; and

• to not be terminated without just cause or excuse.?

Additional protections for platform-based workers include transparency and the right to human review for automated monitoring and decision-making systems through electronic means.

Dispute resolution mechanism

Under the Act, a gig worker may lodge a complaint or dispute in writing to the contracting entity. The contracting entity must resolve the dispute by way of an internal grievance mechanism within 30 days. If the gig worker is dissatisfied with the decision, or the dispute is not resolved within 30 days, the worker may bring the dispute for conciliation before the Director General for Industrial Relations or any appointed officer. 

If no settlement is reached between the parties after conciliation, the matter will be referred to a Gig Workers Tribunal for resolution. All hearings before the Gig Workers Tribunal will be open to the public. The Gig Workers Tribunal’s award will be binding on the parties, and non-compliance with an award may result in criminal penalties.

The Act empowers the Director General of Labour to supervise compliance and enforce awards of the Gig Workers Tribunal. The investigation or enforcement officers appointed by the Director General of Labour have the power to enter in any premise and inspect or seize any document, record or other relevant thing and investigate the commission of any offence under the Act.

Gig Workers’ Consultative Council

The Act also establishes a Gig Workers’ Consultative Council, whose function is to advise and make recommendations to the Government on, amongst other things, minimum earnings rates, the formula to be applied, and the minimum standards to be applied in sectors, regional areas, and types of gig worker or services.

Social security protection

The Act requires platform providers (but not other contracting entities) to register gig workers under the Self-Employment Social Security Act2017, make mandatory deductions on their earnings, and remit contributions to the social security scheme on their behalf. Failure to pay any contribution or deduct the contribution is a criminal offence. However, the Act does not appear to impose an obligation on platform providers to make social security contributions for the benefit of their gig workers.

Occupational safety and health

The Act requires contracting entities to observe safety and health regulations with regard to gig work, including:

• conduct a risk assessment and implement appropriate risk control measures;

• ensure adequate safety measures for any equipment and facility;

• ensure that the gig worker is not exposed to safety and health risk from work arrangements or processes;

• ensure that the gig worker has adequate information, training, instruction and supervision;

• develop and implement emergency procedures; and

• notify the Director General of Occupational Safety and Health of any occupational accident or diseases involving a gig worker. 

Saving of existing service agreements

Existing service agreements entered into before the Act comes into force will continue for their specified duration. However, if any terms and conditions (whether agreed before or after the Act comes into force) are less favourable to the gig worker than those provided under the Act, those terms are void and will be substituted with the terms and conditions provided under the Act.

Takeaway for employers

The Minister has announced details of how members of the Consultative Council will be chosen, with an equal number of members representing contracting entities?and members representing gig workers. However, the Council has not yet been constituted.

Apart from the establishment of the Consultative Council, it will also be necessary for the Government to establish the Gig Workers Tribunal and to establish the procedures for the conduct of proceedings before the Tribunal. Most importantly, the Minister will need to decide on the precise date or dates in March 2026 when the provisions of the Act are to come into operation. 

With the Act poised to come into effect, businesses that are dependent on gig workers should start reviewing their current practices for compliance and to ensure that they continue to remain well-positioned.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.