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Sim Ling KU
Influencing HR in Malaysia | Instagram 152K | TikTok 181K #AuntyHR #BebelBimbo
1mo

POV: Stamping Employment Contracts

Lately, many people have asked: “Is stamping employment contracts mandatory?”

If we’re talking about strictly following the law… Yes, employment contracts are legally required to be stamped under the Stamp Act 1949.

But here’s my beef with the law.

That same Act says employment contracts with salaries below RM300/month are exempted from stamp duty. And guess what? That threshold hasn’t been updated since 1949. I mean, even the minimum wage has been revised five times since it was introduced in 2013. And let’s be real, no one has seen a RM300/month salary in over a decade! (remember, car salesmen >.<)

Now, here’s the important part.

In Malaysia, an unstamped employment contract is still a valid agreement between parties. It does not become void just because it’s missing a RM10 stamp. In fact, the Employment Act acknowledges even an oral agreement is legally binding.

However, the enforceability in court is affected until stamping is done. If a dispute arises and we need to enforce the contract, or defend the company using its terms, we’ll have to get it stamped at that point, along with paying a relatively small penalty.

Malaysian courts have consistently held that lack of stamping is not a fatal flaw. It’s considered a procedural issue that can be rectified by paying the duty. In the Industrial Court, the focus is still on the substantive employment relationship. Even if the contract isn’t stamped, the employment relationship exists.

So, in conclusion, an unstamped employment contract isn’t invalid – it remains as a binding agreement. But to fully enforce it legally (eg. to sue an employee for breach of contract or defend against a wrongful dismissal claim), we need to ensure the agreement gets stamped.

If you ask me whether it’s absolutely necessary, I’d say no. But if we want cover all bases and be super exact about the law, stamping contracts on time is a good practice. After all, it’s only RM10 and can now be done online – unlike back in 1949.

Thoughts?

xoxoxo, AuntyHR

Still binding.

1 Jan 2022.. stamp rm10 no penalty
2025 b4 implementation stamp 10 + penalty waive if appeal
After implementation dun stamp will get penalty …

Tats wat my brain registered …. Details u guys better check n further share here?
Or call lhdn?


This is among some of her answers :
Melissa Lim Shi Hui
Tech lawyer ▪️Legal Educator ▪️
1mo

Great overview of the stamp duty! My advice to companies are always: here're the pros and cons (which is what you said) and what's your risk appetite? Cause you can always still stamp it later in Court (if objections were filed because of the lack of stamping) just that you need to pay penalty lo. and penalty is just % off the RM10.

If you're a small kecik mayung company, maybe you don't wanna stamp cause relationship also not so complicated, you think ok, then proceed. But some companies, from the beginning also a lot of problem already, then just stamp laaa

This post has been edited by TiramisuCoffee: May 27 2025, 12:45 AM

Found d article ... Can't cut n paste ... So u org kena klik msk..

https://www.cmglobal.com.my/malaysia-employ...ing-guide-2025/