Employment Tax

Malaysia | Gig Workers Bill 2025 now law in Malaysia: key compliance highlights

Summary

In line with global trends toward formalising gig work protections, the Malaysian Ministry of Human Resources (MOHR) officially passed the Gig Workers Bill 2025 on 25 August 2025, establishing the country’s first comprehensive legal framework governing the rights and obligations of gig workers and digital platforms. The new law introduces mandatory protections around contracts, pay terms, insurance coverage and dispute resolution, and applies to platforms engaging e-hailing drivers, delivery riders, freelancers, and digital content creators.

The detail

Key highlights of the Bill are summarised as follows:

Key highlights	Details
Definition of gig workers	A Malaysian citizen or permanent resident who enters into a service agreement to perform specified services for a platform provider/contracting entity and receives earnings for those services, including but not limited to: E-hailing drivers (i.e., ride-hailing services) P-hailing drivers (parcel or delivery drivers) Delivery riders (food or goods delivery) Freelancers providing services through digital platforms Digital content creators engaged via online platforms Other workers engaged on a gig or platform-based basis without traditional employment contracts The new legal framework does not classify gig workers as a distinct labour force (neither “independent contractors” nor “employees”) but grants them statutory rights under a new legal category tailored to their work conditions.
Written service agreements (now mandatory)	All gig workers must have a written contract with the contracting entity that clearly outlines the parties to the agreement, the duration and services to be provided, obligations of both parties, the rate and details of earnings, the method of payment and any applicable benefits, tips or gratuities. The contracting entity is required to provide, maintain and ensure gig workers have access to written service agreements (digital or physical) that comply with the Bill’s provisions. Existing service agreements lawfully made prior to the Bill’s enforcement remain valid; however, any terms that are less favorable than those stipulated in the Bill will be deemed void and replaced by the Bill’s provisions. Service agreements mean any agreement whether orally or in writing and whether express or implied for services rendered in Malaysia but does not include a “contract of service” or a “contract of employment” under the relevant employment law legislations in Malaysia.
Non-compete clause	The contracting entity is prohibited from placing any restriction in a service agreement that prevents a gig worker from entering into agreements with third parties.
Payment standards and transparency	The Bill does not set a statutory minimum wage for gig workers; however, the contracting entity must ensure fair and transparent payment details. The contracting entity is prohibited from imposing sudden pay cuts or unilaterally reducing pay without prior notice or agreement. Gig workers can request earnings slips from the contracting entity (except individuals), who must issue them as directed by the Director General of the Department of Labour; failure to comply constitutes an offence.
Social Security Organisation (SOCSO) contributions	Gig workers are entitled to SOCSO contributions and social security benefits in the event of work-related injuries or permanent disability. Contracting entity must: Register gig workers with SOCSO under the Self-Employment Social Security Scheme (SKSPS) Submit gig workers’ information to SOCSO as required Deduct and contribute social security payments from gig workers’ earnings in accordance with prescribed rates Notify gig workers of any shortfall or excess in contributions and facilitate adjustments Comply with occupational safety and welfare measures as directed by SOCSO
Termination	Gig workers cannot be terminated without just cause or excuse, however the Bill does not explicitly define what constitutes “just cause or excuse” for termination thus leaving scope for interpretation. The contracting entity has the right to deactivate a gig worker’s access to their digital intermediary system only if: The deactivation aligns with the terms and conditions outlined in the service agreement; or The gig worker has committed misconduct while performing their services.
Dispute and resolution	The contracting entity is required to establish an internal grievance mechanism in the service agreement, to handle complaints/disputes from gig workers. If disputes remain unresolved, or if no internal grievance mechanism exists, gig workers may escalate the complaint to the Director General for Industrial Relations, Deputy Director General for Industrial Relations, or an appointed officer under the Industrial Relations Act 1967 (the “Conciliator”). Should the Conciliator determine that settlement is unlikely, the dispute will be referred to the Gig Workers Tribunal for resolution.

Tax and other Compliance Considerations

While the bill did not discuss the tax positions of gig workers, it does state that gig workers who enter into service agreements which do not constitute contracts of service or employment contracts would not be classified as employees and the contracting entity is not considered an employer.  Thus, gig workers are generally responsible for their own income tax filings (via Form B) and tax payments.

Nevertheless, this may prompt tax authorities to delve deeper and assess whether the terms and conditions under the service agreement mirrors an employment by considering factors which may imply an employer-employee relationship status such as:

• Exercising significant control over the workers’ schedule, working methods or remuneration rates
• Provision of tools, uniforms or branding to the workers
• Withholding or managing payments to the workers

Where such challenges arise from the tax authorities, they may assert that employer tax obligations have not been complied with for these gig workers.

In this respect, contracting entities that engage and enter into a service agreement with the gig worker will need to carefully consider the terms and conditions to ensure that the intent reflects a contract for service, and not a contract of service to avoid such challenges.

Areas requiring further clarification from the Ministry of Human Resources (MOHR)

The recent enactment of the Gig Workers Bill 2025 marks a significant milestone in recognising and protecting gig workers in Malaysia. However, despite the progressive framework, several areas remain ambiguous and warrant further clarification from the MOHR to ensure effective implementation and compliance by all stakeholders, including but not limited to:

1. Minimum wage application

The Bill highlights minimum wage protections for gig workers but it is unclear whether the existing national minimum wage laws apply fully to gig workers. Further guidance is needed to clarify:

• Whether gig workers are entitled to the full minimum wage protections
• How minimum wages will be calculated or enforced for task-based or irregular work
• The role of the contracting entity in monitoring or guaranteeing minimum wage payments

2. Employees Provident Fund (EPF) contributions

At this point of time, the Bill only mentions that the gig workers are entitled for the social security protections (SOCSO) but does not clarify the obligation to contribute to the EPF for gig workers.

3. Status of foreign contingent workers in Malaysia
   

While the bill only addresses the status and rights of the Malaysian citizen/PR gig workers, clarity is also required on how foreign talent serving in a contingent worker/gig worker capacity in Malaysia are treated from a regulatory perspective. This would include the types of visas that would apply for them to legally carry out services in Malaysia while maintaining an independent contractor status. Currently, at minimum, foreign digital freelancers could rely on De Rantau pass to work in Malaysia.

How we can help

This hybrid legal framework offers gig workers certain protections akin to employees while maintaining their independent contractor status for tax and labour purposes. Contracting entities should carefully evaluate whether their arrangements with individuals who are not employees fall within the broad definition of gig workers under the Gig Workers Bill 2025. If so, companies must assess their obligations under the Bill, including reviewing and updating existing and future service agreements to ensure compliance, collecting necessary information to register gig workers with SOCSO, implementing appropriate health, safety and welfare policies in line with the new requirements, and prepare sufficient documentations for possible future scrutiny under tax or auditing procedures.

As a global mobility service organisation, our team can assist in navigating these requirements, ensuring the operations align with the new law and helping contracting entities meet their tax and social security obligations related to the gig workers.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Hilda Liow
Partner

Lim Phing Phing
Partner

Wee Lay Har
Director

Loh Zi-Lynn
Senior Manager

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