Public Holiday and Overtime Guide – Sabah Labour Ordinance & Amendments Act 2025

The Labour Ordinance of Sabah (Amendment) Act 2025 (Act A1753) introduces significant changes to employment standards in Sabah, aligning them more closely with the Malaysian Employment Act 1955. Key updates include the reduction of weekly working hours and an increase in mandatory public holidays.

1. Basic Calculation Formulas

To calculate overtime and public holiday pay, you must first determine the Ordinary Rate of Pay (ORP) and the Hourly Rate of Pay (HRP).

Ordinary Rate of Pay (ORP)

The ORP is the base daily rate used for most statutory calculations.

Monthly Basis: ORP = Monthly Wages ÷ 26

Weekly Basis: ORP = Weekly Wages ÷ 6

Hourly Rate of Pay (HRP)

The HRP is the rate used specifically for overtime (OT) hours.

HRP = ORP ÷ Normal Hours of Work per Day

(Note: Normal hours per day is typically 8 hours, provided the weekly total does not exceed 45

hours.)

2. Overtime (OT) Rates and Formulas

Overtime is defined as work performed in excess of the normal hours of work per day or after the 10-hour spread-over period.

Work on Rest Day (Within Normal Hours)

For employees on a monthly rate of pay

Work ≤ 4 hours (Half day): ½ day’s ORP

Work > 4 hours but ≤ 8 hours: 1 day’s ORP

3. Public Holiday (PH) Pay Formulas

Under Section 103, employees are entitled to a paid holiday on 15 gazetted days. If required to work on these days, they receive additional compensation.

Working on a Public Holiday (Normal Hours)

If an employee works during normal hours on a public holiday, they are entitled to two days’ wages at the ORP in addition to their holiday pay.

Total Pay for PH Work = Holiday Pay (included in monthly salary) + (2 × ORP)

Working Overtime on a Public Holiday

Any work exceeding the normal hours on a public holiday is paid at 3.0x the HRP.

4. Practical Examples

Example A: Normal Day Overtime

An employee earns RM 2,600 per month and works 2 hours of OT on a Tuesday.

ORP = 2,600 ÷ 26 = RM 100
HRP = 100 ÷ 8 = RM 12.50
OT Pay = 12.50 × 1.5 × 2 = RM 37.50

Example B: Working on a Public HolidayThe same employee (ORP RM 100, HRP RM 12.50) is required to work 10 hours on Malaysia Day (a mandatory public holiday).
Normal Hours Pay (8 hours): 2 × ORP = 2 × 100 = RM 200
OT Hours Pay (2 hours): 3 × HRP × 2 = 3 × 12.50 × 2 = RM 75
Total Additional Pay: RM 200 + RM 75 = RM 275  
(This is in addition to the RM 100 already included in the monthly salary for the holiday itself.

Example C: Incomplete Month (New 2025 Formula)An employee with a salary of RM 3,000 starts work on the 11th of April 2025 (a 30-day month).
Formula: Monthly Wages ÷ Days in Month × Days Eligible
Calculation: 3,000 ÷ 30 × 20 = RM 2,000