COVID-19: Advice for Employers

What should employers do for the salaries, wages and related costs during Movement Control Order (MCO)?

With the implementation of the Order from 18 March 2020, employers are now facing a problem, i.e. continue to pay employees’ salaries while work cannot be performed due to MCO. What should employers do?

Current status

1) Employers are required to pay salary and related allowances during MCO, except for transportation allowance and attendance allowance. Employers cannot force their employees take annual leave or unpaid leave.

If an employer decides to retrench, temporarily lay-off or reduce salary, the employer must report to the Ministry of Labour via Borang PK.

3) For employees with a monthly salary less than RM4,000 and contribute to EIS, employers can submit applications with Perkeso since 20 March 2020 and get 6 months financial assistance (RM600 per month) if their employees go for unpaid leave. (Submission of Borang PK is necessary).


1) As it is rather difficult to predict the end of MCO, employers are advised to submit Borang PK to the Labour Department in order to obtain the rights to retrenchment, temporarily lay-off, voluntarily separation scheme (vss) or salary reduction of employees.

2) Employers may announce the available options to their employees as below: –

  • Adjust working hours based on workload at home and the salary accordingly (e.g. 2 working hour per day, and the remaining 6 hours are treated as unpaid leave);
  • Working hours remain at 8 hours per day and implement temporary pay-cut (e.g. reduce 20%);
  • Unpaid leave for those who are unable to work from home;
  • Voluntary Separation Scheme (VSS).

Please seek professional advice from HR professionals or the Labour Department before implementation of your plan.

Useful links

👉Download Borang PK –…/Pemberhentian_Peke…/borang_pk.pdf

👉Employment Retention Plan (ERP) –

👉Employment Insurance System (EIS):

👉Borang PK Guidance –