Compliance check: Sick leave entitlements in Singapore and Malaysia

Sick leave entitlements are a fundamental aspect of employment law across South-East Asia, yet the statutory frameworks governing them differ considerably between jurisdictions. This edition of Compliance Check examines the sick leave position in Malaysia and Singapore, contrasting the approach taken under each country's employment laws.

Malaysia

Sick leave entitlement in Malaysia is governed by Section 60F(1)(aa) of the Employment Act 1955 (Malaysia EA), which provides that where hospitalisation is not required, an employee is entitled to paid sick leave of:

• 14 days in the aggregate in each calendar year if employed for less than two years;
• 18 days in the aggregate in each calendar year if employed for two years or more but less than five years; and
• 22 days in the aggregate in each calendar year if employed for five years or more.

Additionally, employees are entitled to a further 60 days' sick leave if hospitalisation is required.

Notably, sick leave entitlement is expressed as a fixed quantum "in the aggregate in each calendar year" notas a daily or monthly accrual, and is tied to the calendar year rather than a rolling 12-month service cycle.

This is in deliberate contrast to Section 60E of the Malaysia EA, which governs annual leave and contains an express proration provision, stating that entitlement "shall be in direct proportion to the number of completed months of service". The absence of that language in Section 60F of Malaysia EA indicates that sick leave operates on a full-year basis and is not intended to be split or adjusted mid-year.

Therefore, it is arguable that pursuant to Section 60F(1)(aa) of the Malaysia EA, an employee who joins on 1 August 2024 and reaches two years of service on 1 August 2026 will be entitled to 18 days of paid sick leave for the 2026 calendar year (as opposed to 14 days), although, there has not been a binding decision of the Malaysian courts that directly affirms such interpretation of Section 60F in the specific context of employees who complete 2 years of service midway through a calendar year.

Singapore

In Singapore on the other hand, under Section 89 of the Employment Act 1968 (Singapore EA), the number of days of paid sick leave an employee is entitled to take each year depends on their service period, as follows:

The amount of paid outpatient and hospitalisation sick leave that an employee can take is capped at their sick leave entitlement. Sick leave entitlements accrue on a yearly basis and unused sick leave will not carry over from year to year.

This means that:

• An employee with less than 3 months' service is not entitled to any paid sick leave; and
• An employee with 6 months' service or more is entitled to 14 days of paid outpatient non-hospitalisation leave and 60 days of paid hospitalisation leave. Unlike Malaysia, the 60 days of paid hospitalisation leave is inclusive of the 14 days of outpatient sick leave entitlement.

The difference between the statutory frameworks in Singapore and Malaysia are instructive. Where Malaysia's framework allocates sick leave as a fixed annual quantum tied to a calendar year, giving rise to the mid-year milestone issue described above, Singapore's framework is structured around completed months of service, with entitlement stepping up at clearly defined intervals. As Singapore's framework is explicitly service-length driven, there is no equivalent ambiguity about whether the higher entitlement applies for the whole of a calendar year or only from the anniversary date.

Key Takeaways

Employers in Malaysia should:

• review current sick leave policies to assess whether they prorate sick leave mid-year against an employee's service anniversary date — if so, those policies should be amended to align with the correct statutory position; and
• treat the calendar year in which an employee will reach a service milestone as a "milestone year" for sick leave purposes, with the higher entitlement applying for the whole of that calendar year from 1 January.

For employers in Singapore, it is important to:

• ensure sick leave entitlements are tracked against completed months of service rather than calendar year milestones, consistent with the Singapore EA framework;
• remember that the entitlement steps up at defined service intervals – payroll and HR systems should be configured to update entitlements automatically at each threshold; and
• review employment contracts to confirm that any contractual sick leave provisions are at least as favourable as the statutory minimums.

Herbert Smith Freehills Kramer LLP and Prolegis LLC have established a Formal Law Alliance licensed by the Legal Services Regulatory Authority of Singapore known as Herbert Smith Freehills Kramer Prolegis Alliance, with Singapore law advice provided by Prolegis LLC. The two firms cooperate closely in Singapore to deliver a complementary and seamless legal service.