Malaysia's Gig Worker Law Covers 1.64 Million, But Gaps Remain

A Regional First in Scope

Malaysia's parliament passed the Gig Workers Act in September 2025, bringing it into force the following April. The legislation recognizes 1.64 million gig workers, nearly 10 per cent of total employment, including e-hailing drivers, p-hailing motorcycle riders, and freelancers in creative fields. The Act provides social protection, dispute resolution mechanisms, and tripartite consultation structures, a scope that exceeds comparable laws in Singapore, Spain, and Japan.

The law arrives as the gig economy in Malaysia was valued at RM650 million in 2025, supported by 146 platforms launched since 2014. The COVID-19 lockdowns accelerated growth in platform-based transport and delivery, with a 2022 Department of Statistics survey counting 650,000 gig workers, including 370,000 active p-hailing riders. By March 2026, the total had risen to 1.64 million, driven partly by the Act's inclusion of freelance and part-time workers alongside platform-based labor.

Who Are Malaysia's Gig Workers?

The 2022 survey offered a demographic snapshot of p-hailing riders that likely reflects the broader platform workforce. Three-quarters reported gig work as their main income source, and 70 per cent considered it their primary job, challenging the narrative of gig work as supplementary. The workforce skews young, with 77 per cent under 40, compared to 61 per cent in the general Malaysian labor force. Ethnic Malays comprise 76 per cent of riders, well above their 57 per cent share of the population.

Educational attainment among riders is slightly lower than the national average, with 40 per cent having completed only secondary schooling versus 48 per cent across the workforce. Earnings remain a persistent concern. An August 2023 investigation found e-hailing drivers earning an average of RM1,350 monthly after expenses. The 2022 survey showed that the share of p-hailing riders earning below the RM1,500 minimum wage fell from 43.1 per cent before joining platforms to 30.7 per cent afterward, an improvement that still leaves nearly one-third below the wage floor.

Social Protection Uptake Uneven

Social security coverage among gig workers has improved but remains incomplete. The 2022 survey found 72 per cent of p-hailing riders enrolled in SOCSO, the Social Security Organisation's scheme for work-related injury and accidents. Of those, 46 per cent paid their own contributions, while 27 per cent had contributions covered by platform companies. Regulatory moves made SOCSO membership compulsory for e-hailing drivers in November 2018 and p-hailing riders in October 2021, lifting enrollment rates.

Participation in the Employees Provident Fund, Malaysia's retirement savings scheme, lags far behind. Only 22 per cent of surveyed riders held EPF accounts, with 16 per cent self-sponsored and 6 per cent company-sponsored. The voluntary nature of EPF enrollment for gig workers leaves a significant coverage gap in long-term financial security.

Malaysia's law extends beyond platform workers to include freelancers in creative and performing arts, translators, and journalists, a breadth uncommon in regional legislation. Singapore's Platform Workers Act, enacted in 2024, covers only ride-hail and delivery workers and maintains their classification as independent contractors. Spain's 2021 Riders' Law applies solely to p-hailing workers but grants them employee status, including hourly minimum wage and union rights. Japan's 2024 Freelance Protection Act covers gig economy workers as independent contractors, requiring market-rate remuneration and written contracts, and mandates contributions to the National Pension Scheme.

Legislative Precedents and Policy Choices

The 2017 Self-Employment Social Security Act set the stage for the Gig Workers Act by defining self-employed persons engaged in passenger transport, food and goods delivery, and performing arts. SESSA established a sectoral approach and designated these occupations as self-employed rather than employees, a classification the GWA retains. SESSA also structured SOCSO contributions to come solely from workers' earnings at approximately 1.25 per cent, departing from the standard joint contribution model in which employers pay 1.75 per cent and employees contribute 0.5 per cent.

This single-contribution model has implications for platform providers' financial obligations. Had Malaysia adopted the concept of dependent self-employment, which recognizes workers who depend on a single platform for income, there might have been scope for joint SOCSO contributions. Grab, the largest platform provider, voluntarily began covering SOCSO contributions for its drivers, and in 2022 the government introduced a partial subsidy for e-hailing drivers' SOCSO payments to address low compliance.

Implementation Questions Ahead

The Gig Workers Act marks a legislative milestone, yet gaps and uncertainties remain. The law does not establish a statutory earnings floor for gig workers, leaving income determination to platform providers and market dynamics. This contrasts with Chile's 2022 amendment to its Labour Code, which sets an earnings floor for dependent platform workers as a ratio of the minimum wage for active work hours, and with Vietnam's 2019 Labour Code, which requires platform workers to earn at least the statutory minimum wage.

Dispute resolution mechanisms and tripartite consultation structures are written into the Act, but their effectiveness will depend on implementation capacity and enforcement resources. The law's broad coverage, encompassing both platform workers and freelancers, introduces administrative complexity that will test regulatory agencies' ability to monitor compliance and address grievances across diverse sectors.

The Act's passage reflects the growing economic and political weight of gig workers in Malaysia. As the sector continues to expand, the legislation's impact on earnings stability, social protection coverage, and worker representation will shape the labor market for years to come.