Gig Workers Bill 2025: Reshaping Malaysia’s labour law

 

THE gig economy is now a defining feature of the modern labour market, marked by platform-based, flexible and short-term work.

While it offers income opportunities, it also exposes workers—especially young and precarious workers—to income instability, unclear employment status and shifted risks.

The Gig Workers Bill 2025 is the paradigm shift in protecting the third category of labour which is the gig workers in Malaysia when it is legislated soon after the Bill was passed last year.

This effort illustrated a continuous commitment from Malaysia to align with the international standard of the United Nations Guiding Principles on Business and Human Rights through Responsible Business Conduct (RBC) and align with the Sustainable Development Goals and Malaysia’s National Action Plan on Business and Human Right (NAPBHR).

RBC requires enterprises to go beyond minimum legal compliance. Malaysia’s Gig Workers Bill 2025 may therefore be understood as a legislative effort to operationalise RBC principles within the gig economy.

RBC provides the normative framework for analysing gig-work regulation by linking business practices to human-rights and labour standards, with an emphasis on prevention, accountability and access to remedy. It is particularly relevant to non-standard work, where legal gaps allow flexibility to become “normalised insecurity”.

Accordingly, the Gig Workers Bill 2025 is analysed through four RBC pillars : (1) contractual transparency; (2) income protection and fair treatment; (3) social protection and occupational safety; and (4) access to remedy and institutional governance.

Pillar One requires contractual clarity and rejects one-sided that conceal risks from workers, a concern that is especially acute in non-standard work characterised by power and information asymmetries.

Malaysia’s Gig Workers Bill 2025 responds directly by statutorily defining “gig worker” and “contracting entity,” recognising service agreements whether written, oral, express, or implied, and mandating minimum contractual terms including transparent payment information.

Pillar two elevates fair remuneration and income predictability as core components of decent work, addressing economic vulnerability that is endemic in platform-mediated labour.

The Gig Workers Bill responds by requiring contracting entities to disclose payment rates in advance and by giving gig workers a right to an earnings statement on request enforcing transparency that helps workers verify pay and plan financially.

(Image: HRM Asia)

Where a service agreement omits payment terms, the Bill imposes a default rule which earnings must be paid within seven days of service completion. The Bill also forbids termination or deactivation without “just cause or excuse”.

Pillar three requires businesses to protect workers’ physical safety and social security even where formal employment relationships do not exist, stressing prevention over mere post-accident remedies.

Malaysia’s Gig Workers Bill operationalises this by making registration under the Self-Employment Social Security Scheme (PERKESO SPS-Gig) mandatory, and by requiring platform providers or contracting entities to integrate with PERKESO via API for automatic contribution collection at a rate of 1.25% of earnings.

The Bill expressly imposes occupational safety and health (OSH) duties on contracting entities, including conducting risk assessments, providing training, ensuring the provision and maintenance of equipment, establishing emergency procedures, and reporting accidents, while also granting enforcement powers to regulatory officers.

Pillar four requires accessible remedies and genuine stakeholder participation to correct power imbalances between platforms and workers.

The Gig Workers Bill mandates internal grievance mechanisms that contracting entities must use to attempt to resolve written complaints within 30 days, after which disputes may be escalated for conciliation under the director-general of Industrial Relations.

Where conciliation fails, matters can be referred to the Gig Workers Tribunal, a specialist forum empowered to issue binding awards with criminal sanctions for non-compliance.

The Bill also establishes a Tripartite Consultative Council to institutionalise social dialogue between workers, industry and government and to recommend sectoral standards.

These mechanisms offer faster, specialist dispute resolution and a formal voice for workers, but their real-world effectiveness will depend on enforcement capacity, Tribunal caseload management and timely implementation.

The Gig Workers Bill 2025 marks a shift from reactive regulation to an RBC-based governance model by preserving labour flexibility while embedding minimum protections for gig workers.

By translating RBC principles into enforceable legal obligations, the Bill addresses long-standing structural risks. Its success will depend on effective enforcement and shared responsibility in positioning Malaysia as a regional benchmark. 

Associate Professor Dr Nurhidayah Abdullah and Muhammad Aiman Mohd Ismail are from the Faculty of Law, Universiti Malaya.

The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.

- Focus Malaysia.