Gig Workers in Malaysia: Is the New Law a Good Deal?

INTRODUCTION

The gig economy, which provides on-demand services predominantly intermediated through digital platforms, particularly in private transport and package or food delivery, has rapidly grown worldwide. It presently accounts for 1.64 million workers in Malaysia, or almost 10 per cent of total employment. This sector structurally departs from conventional wage employment; most countries regard gig workers as self-employed or independent contractors, for whom the benefit of flexibility often comes at the expense of economic security and various protections conventionally afforded only to employees.

The Gig Workers Act (GWA), passed by parliament in September 2025 and enforced from April 2026, recognises the specific conditions and needs of gig workers, including freelancers and part-time workers, and provides social protection along with mechanisms for dispute resolution and tripartite consultation. The GWA is a historical landmark of greater breadth and depth than comparable legislation in countries such as Singapore, Spain, and Japan (see Table 1), and potentially benefits gig workers who are growing in economic and political significance. However, these are early days; various gaps and uncertainties remain.

This article profiles gig work in Malaysia, with reference to selected Southeast Asian and other countries, outlines the journey from early advocacy for gig worker legislation to the GWA, and evaluates the difference the GWA brings and its implementation prospects and challenges. It concludes with a reflection on the significance of the Act on the Madani administration.

GIG WORKERS: PROFILE AND KEY ISSUES

Gig work emerged in Malaysia in 2012, with the launch of various transport and delivery apps. Since then, the gig economy has reshaped swathes of the labour market, most saliently in transportation and delivery services, where platforms facilitate on-demand jobs for people who own or lease vehicles. In Malaysia, 146 gig work platforms have emerged since 2014 (127 local, 19 foreign). The gig economy was valued at RM650 million in 2025 (MDEC 2023).

The proliferation of online retail during the COVID-19 lockdowns spurred the growth of platform-based transport and delivery services. The number of e-hailing car drivers (people transportation) and p-hailing motorcycle riders (package and food delivery) has only been sporadically estimated, with a Department of Statistics (DOSM) survey of April-July 2022 putting the number of total gig workers at 650,000, of which 370,000 were active p-hailing riders (ILMIA 2022). The gig worker bill proceedings were accompanied by estimates — likely corresponding with the law’s coverage of e-hailing and p-hailing workers as well as freelance and part-time workers — that put the total number of gig workers at 1.64 million in March 2026.

This growth has been accompanied by concerns over the workers’ status under the law, and consequently, their well-being and social security. The 2022 DOSM survey painted a demographic and socioeconomic profile of p-hailing riders, specifically, although the findings could presumably apply to platform-based gig workers more generally. While the flexibility allows for part-time participation for supplementary income, the majority are involved on a full-time basis, with 74 per cent reporting that gig work is their main income source and 70 per cent their primary job. The age profile is as expected, young (77 per cent under 40, compared to 61 per cent in the Malaysian workforce), and predominantly ethnic Malay (76 per cent of riders, compared to 57 per cent of the population). P-hailing riders in the survey attained less education than the average worker, but not by wide margins: 40 per cent had completed only secondary schooling, compared to 48 per cent in the workforce.

The gig economy has bolstered earning opportunities, but gig workers experience persistently low income and patchy social protection coverage. An August 2023 investigation by the newspaper Utusan Malaysia found that e-hailing drivers earned an average of RM1,350 in monthly net income. Similarly, respondents in the DOSM survey reported their earnings before and after participating in p-hailing: the share earning below the monthly minimum wage of RM1,500 dropped from 43.1 per cent to 30.7 per cent. The improvement notwithstanding, the findings underscore their low earnings. On social protection, 72 per cent were members of SOCSO (Social Security Organisation), a defined-benefit scheme that insures workers for work-related injury and accidents. SOCSO members make monthly contributions; of the survey’s 72 per cent with SOCSO accounts, 46 per cent reported that their contributions were paid by the rider, 27 per cent by the platform company. While short of universal coverage, this relatively high SOCSO rate concurs with regulatory initiatives that made membership compulsory for e-hailing in November 2018 and p-hailing in October 2021. The survey found low Employees Provident Fund (EPF) membership. Participation in the retirement savings scheme, which is voluntary, was only 22 per cent (16 per cent self-sponsored, 6 per cent company-sponsored).

Uniquely to Malaysia, the gig worker definition was extended to freelance workers who are not engaged with a platform provider, including creative and performing arts workers, translators, and journalists, as listed on a schedule.

The key concerns surrounding gig workers have featured in enacted or proposed legislation for gig, platform, or freelance workers globally, including Southeast Asia (Table 1). Some countries have introduced specific legislation (Singapore, Spain, Japan) while others have amended existing laws and regulations (Chile, Indonesia, Vietnam). A few cases of proposed legislation shed further light on the options and limitations of gig economy regulation.

Country experiences provide context for Malaysia’s approach. There is no international consensus on the fundamental question of whether to classify gig workers as employees or as self-employed workers/independent contractors. The ILO’s 13^th Session in June 2025 proposed a broad definition of “digital platform workers” who may be either employees or self-employed workers. Table 1 reflects the multiplicity of definitions and differences in scope: Singapore’s law covers platform workers; Spain’s applies only to p-hailing riders. Legislation that recognises gig workers as employees would accordingly grant them equivalent rights, including minimum wage and union representation. Countries that differentiate dependent from independent self-employment, such as Chile, are also inclined to grant employee entitlements to dependent self-employed workers. Gig economy legislation invariably clarifies contractual frameworks and stipulates worker and platform responsibilities (text that would be too voluminous for Table 1), but varies in the regulation of workers’ earnings.

Table 1. Selected Southeast Asian and other countries: Salient features of enacted or proposed gig work legislation, or existing laws extended to gig workers

Earnings	Social protection	Representation
Enacted legislation specifically for gig workers
Singapore: Platform Workers Act (2024) for ride-hail or delivery workers  Workers regarded as independent/self-employed contractors
No statutory setting; determined by platform provider with mutual agreement	Work injury compensation Central Provident Fund contributions	Representation by platform workers organisations Industrial Relations amendment 2025 permits collective bargaining
Spain: The Riders’ Law (2021) for p-hailing  Workers regarded as employees
Hourly minimum wage enforced	Eligible for social protection	Workers may join unions, including sector-specific Union of Associations of Self‑Employed Workers and Entrepreneurs
Japan: Freelance Protection Act (2024) for gig economy workers  Workers regarded as independent/self-employed contractors
Remuneration minimally at market rate Written contracts, timely payment	Requests for work-life balance, including childcare, must be accommodated  Mandatory gig worker contributions to National Pension Scheme	Union membership implicitly permitted by allowing freelancers to be classified as “workers”
Amended laws for gig workers
Chile: Law No. 21.431 addition to Labour Code (passed in 2022)  Distinction between dependent vs independent platform workers
Earnings floor for dependent workers’ active work hours: ratio per minimum wage	Gig workers entitled to social security benefits Decree Law No. 3.500: regulates individual account-based pension system	Dependent workers (employed in a subordinate and dependent position) have the right to unionise
Indonesia: Minister of Transportation Regulation No. PM.12 of 2019  For motorcyclists in gig work, classified as “partners” (independent contractors)
Workers’ earnings and platforms’ commission to be determined by Minister of Transportation	BPJS Ketenagakerjaan: provides social security for gig workers, such as old age security and work accident insurance	Union participation precluded by definition of gig workers as partners
Vietnam: Labour Code (2019) – no specific new law for gig/platform workers
Not less than the statutory minimum wage, with differentiation by location	Workers entitled to compulsory social protection, health and unemployment insurance Platform providers to increase wages of workers lacking social protection	Trade Union Law 2012 – allows informal workers to form, join, and participate in trade union activities.
Proposed legislation for gig workers
Philippines: Protektadong Online Workers, Entrepreneurs, Riders, at Raketera (POWERR) Bill; Freelance Workers Protection Bill  Gig workers to be regarded as employees
Not less than the statutory minimum wage, differentiated by location	Workers must be enrolled in Philippine Health Insurance Corporation (PhilHealth, Social Security System (SSS), and applicable programmes	Workers may self-organise, as unions, cooperatives, and other units, and engage in collective bargaining
Thailand: Independent Workers Promotion and Protection Bill   Gig workers to be regarded as independent/semi-independent workers
Likely continuation of fare rate oversight by Ministerial Regulation on Ride‑Hailing Cars (2021)	Independent Workers Promotion and Protection Fund to be established Gig workers may voluntarily contribute to Social Security Fund (SSF)	Workers may form organisations, but unclear whether this encompasses labour unions

MAKING THE LAW: PRECEDENTS, CONSULTATIONS, DECISIONS

Various legislative, policy, and political developments shaped Malaysia’s GWA. The Self-Employment Social Security Act (SESSA) Act (2017) defined self-employed persons as citizens or permanent residents engaged in self-employment activities, including passenger transport, food and goods delivery, and performing arts. Although SESSA adopted a sectoral approach and did not specify platform-based employment, it set a precedent of designating these occupations as self-employed rather than employees and became a reference point in the gig worker legislative process. SESSA also stipulated SOCSO contributions only from the workers’ earnings of approximately 1.25 per cent of earnings, in contrast to the regular practice of joint contribution, where total contributions per employee consist of 0.5 per cent from employee salary deductions and 1.75 per cent paid by employers. Had Malaysia adopted the concept of dependent self-employment, which arguably aligns with the structure of platform-based work, there might have been scope for SOCSO contributions to be jointly paid by platform providers and workers. Patchy compliance with SOCSO, due to its reliance on drivers’ self-registration and sizable cost, prompted Grab, the largest platform provider, to make SOCSO contributions for its drivers. In 2022, the government introduced a partial subsidy for e-hailing drivers’ SOCSO contributions.

The Ministry of Transport (MoT) introduced regulations for hailing digital platforms. From 2018, amendments to the Commercial Vehicles Licensing Board Act required platform operators to obtain an “intermediation business license” and to be generally subjected to the same rules as taxi companies. In 2019, MoT formalised safety regulations by requiring e-hailing drivers to obtain a public transportation vehicle license and comply with insurance, vehicle inspection, and other requirements. MoT also capped the commission that operators can claim, at 20 per cent for private vehicles and 10 per cent for taxis. In 2020, analogous regulations for p-hailing riders were introduced, including compulsory participation in SOCSO.

The plight of gig workers and their demands for better conditions gained political prominence. In October 2019, p-hailing riders met with then Youth and Sports Minister Syed Saddiq to express their grievances over their platform’s introduction of terms that workers claimed would unfairly squeeze their earnings. This is regarded as the first prominent articulation of the need for legislation to protect workers. Political figures have also called for the establishment of a Gig Workers Commission, resoundingly at UMNO’s June 2023 general assembly and the Bumiputera Economic Congress of March 2024. Subsequently, in July 2024, Prime Minister Anwar Ibrahim promised to table a Gig Workers Commission Bill, and the Human Rights Commission (Suhakam) supported the idea.

Public advocacy sprouted from the gig worker community, through formal organisations and informal social media networks. The Gabungan E-hailing Malaysia (GEM, Malaysia E-hailing Coalition), formed in August 2020 as a movement to champion gig worker interests, became an influential coalition of over 20 groups, about half of which are formally registered. GEM currently represents around 10,000 e-hailing and p-hailing workers.

The Ministry of Human Resources (MoHR) initiated the drafting of gig worker legislation in mid-2023. Gig worker advocates were assured by then Minister of Human Resources R Sivakumar of a solution, but not necessarily the formation of a commission. The process gained momentum under Steven Sim, Sivakumar’s successor from December 2023, who initiated a study by MoHR with the University of Malaya (MoHR-UM), to develop a legislative framework for platform-based gig workers. The study’s conclusion in October 2024 was followed by town hall meetings with gig workers, platform providers, employers, and other stakeholders at which Ministry officials made presentations and solicited feedback, decidedly holding such deliberative forums rather than private engagements. This approach and the level of consultation have been endorsed as broad and sufficient, but got a mixed reception by the established non-government tripartite organisations, the Malaysian Employers Federation and the Malaysian Trades Union Congress (MTUC), who are more accustomed to closed-door consultations. The MEF and MTUC eventually expressed support for the GWA after its enactment. Gig worker organisations and platform companies were more actively involved in GWA deliberations – testifying to the dynamic and novel features of the gig economy. 

The GWA drafting progressed through early 2025, guided by the MoHR-UM report published in December 2024. Based on a synthesis of 15 country experiences and in-depth interviews and focus group discussions with gig workers, platform providers, and other stakeholders, the report recommended the following key functions: gig worker definition,  transparent written contracts, stipulation of worker and platform provider responsibilities, data disclosure and aggregation, dispute resolution mechanisms — first through internal mediation, then an external tribunal — and a federal commission, at a proposed initial budget of RM100 million. The proposal conferred an expansive mandate on the commission, including compliance enforcement, implementation of training programmes, and database maintenance. Notably, the report made a noncommittal reference to Malaysia’s Cabinet decision in June 2024 to place a gig economy commission in the Prime Minister’s Department, headed by Deputy Prime Minister Zahid Hamidi.

MoHR adopted many of the recommendations and an inclusive approach to coverage. The scope of “gig workers” was expanded beyond e-hailing and p-hailing workers to non-transport workers on platforms such as Troopers, which connects “part-time workers” to jobs in event facilitation, frontline services, and warehousing. Uniquely to Malaysia, the gig worker definition was extended to freelance workers who are not engaged with a platform provider, including creative and performing arts workers, translators, and journalists, as listed on a schedule. Advocacy groups, notably the Malaysian Professional Film Workers Association (Profima), played important roles in broadening the GWA’s ambit. The issues of written contracts and social protection were emphasised across the board, along with other concerns such as employment records that would increase workers’ access to loans and financial services, as raised by Troopers. Among the salient departures from the recommendations are the establishment of a consultative council instead of a commission as the oversight entity, and the omission of data management by platform providers and data aggregation by the government.

PROVISIONS AND OMISSIONS

The GWA provides a legal framework that safeguards social protection and institutionalises oversight of contracting disputes and gig worker concerns, including earnings. The outcome also reaches pragmatic compromises amid contending stakeholders’ interests and reflects operational considerations of what would be achievable within time and resource constraints. The Madani administration had set a tight timeline for completing this mission and showed wariness toward commitments that would be challenging to implement.

The Act’s homogeneous definition of a gig worker as an independent contractor — specifically, an individual who enters into a service agreement with a contracting entity — aligns with existing legislation on self-employment, but also precludes claims for rights and provisions currently reserved for employees. Differentiating between dependent self-employment and independent self-employment and placing platform-based gig workers in the former category, which approximates employee conditions, could provide grounds for extending employee rights and provisions, such as EPF contributions, to platform-based gig workers. This route was not taken, but Malaysia’s GWA must be credited for its broad coverage that includes platform-based workers (in e-hailing, p-hailing, and a range of part-time work) and freelancers and self-employed persons across the spectrum.

A proper assessment requires a closer look at the specifics. Table 2 outlines the key elements, salient provisions and omissions within each element. The GWA sets out the rights and responsibilities of gig workers and contracting entities and regulates the substance and transparency of service agreements. However, the GWA does not mandate requirements on contracting entities, especially platform providers, to stringently maintain its database and report to a designated public authority, for monitoring and policymaking purposes. Such requirements could certainly be imposed on platform providers, for instance, as stipulated in Singapore’s Platform Workers Act.

Table 2. Gig Worker Act: Key Elements and Outcomes

Element	Outcomes: Provisions and Omissions
Rights and responsibilities	Provision  Gig worker rights and contracting entity duties Legal requirements of service agreements Omission  No requirements on platform data maintenance or disclosure to authorities for monitoring and policymaking
Social protection	Provision Compulsory Self-Employment Social Security Scheme (SESSS) for work-related injury (platform providers must enrol gig workers and make contributions via earnings deductions) Omission No mandate on EPF (retirement savings) and EIS (unemployment benefits)
Dispute resolution	Provision  Legal framework for resolution in stages (1) internal mediation (2) government-administered conciliation (3) Tribunal presided by an Industrial Court judge
Worker representation	Provision Workers may form and join organisations Omission Gig workers precluded from trade unions
Consultative Council	Provision Tripartite body to advise government specifically on minimum earnings  Omission No articulation of other matters, although there is room for discretion to address important gig worker concerns, e.g. retirement savings and unemployment insurance.

The GWA’s mandate for contracting entities to register gig workers in the Self-Employment Social Security Scheme (SESSS) marks a breakthrough for gig workers, in ensuring they are insured for work-related injury. This should raise the participation of gig workers in the SESSS, which stood at a dismal 26 per cent of overall gig workers in May 2025, with exceedingly lower rates in the arts sector. Nonetheless, some gaps have been highlighted, including possible exclusion of workers under foreign platforms and implementation challenges, such as duplicative SESSS membership for workers engaged with more than one platform. The omission of mandated participation in the EPF and Employment Insurance System (EIS) exposes gig workers to inadequate retirement savings and unemployment benefits. Their inclusion would face some hurdles; the EPF rests under the ministry’s jurisdiction (Finance), and unemployment can be difficult to define in the gig economy with fluid entry and exit. These social protection lacunae are the crucial gig worker issues to be addressed next, although it is also unclear which institution would oversee such policy deliberations.

Gig workers would gain from the institutionalisation of dispute settlement mechanisms. The GWA’s three-step process is fair and methodical: complaints and grievances are to be settled first within organisations, followed by conciliation mediated by the government. Disputes that remain unresolved would be arbitrated by newly established tribunals, headed by industrial court chairpersons whose tenures were increased from two to four years, and salaries were raised together with all judges, effective January 2026.

In terms of gig worker representation, particularly on the principal issue of earnings, the GWA grants the right to form, join, or participate in gig workers’ associations under the Registrar of Societies. However, gig workers are precluded from union membership (Registrar of Trade Unions) owing to their status as self-employed persons or independent contractors. Gig worker unionisation and collective bargaining would be contingent on amendments to the Trade Union Act. The immediate priority of the GWA is the effective work of the consultative council, which is narrowly mandated to set minimum earnings levels and sectoral differentiations, although it may deliberate other matters at its discretion.

The omission of mandated participation in the EPF and Employment Insurance System (EIS) exposes gig workers to inadequate retirement savings and unemployment benefits.

The consultative council is a GWA centrepiece. Its inaugural membership, with former top senior servants as chair and deputy chair, seven government officials, six representatives each of selected platform providers and gig worker organisations, and five academics, maintains a tripartite balance while notably excluding traditional employer and union entities. The council’s task of setting minimum earnings will be important and challenging, but available baselines, such as the taxi industry’s gazetted pricing, could be a reference point for regulating e-hailing drivers’ income. The council would need to scrutinise platform providers’ algorithmic pricing models. It is authorised to collect data for this purpose, but such efforts would be ad hoc and potentially limited by the lack of mandatory data disclosure by platform providers.

The decision against establishing a commission was perceivably due to the heavy fiscal outlays and potential political co-optation, given the powers that could be conferred on a commission and the importance of the Malay youth electorate, who comprise a disproportionate share of gig workers. These concerns are sustained by the current rhetoric that misleadingly describes the GWA as having instituted a “gig economy commission” (SEGIM). Malaysia’s government has to abide by the law, which has established a leaner consultative council. But it will also need to find ways and institutional frameworks to address some of the policy objectives, such as comprehensive data-driven policy monitoring and broader policy work on EPF and EIS provisions for gig workers.

CONCLUDING NOTE

Malaysia’s Gig Workers Act is a legislative milestone for the Madani administration amid a dynamic economic landscape. The political capital invested in the project has achieved considerable results at a robust pace. Minister of Human Resources R Ramanan spiritedly declared GWA’s enforcement from April 2026, clearly mindful of its socioeconomic importance and potential political dividends.

The process of realising better livelihood and security has just begun; much is riding on credible, fair and effective GWA implementation, particularly in regulating gig worker earnings. Various gaps in social protection provision and a lack of clarity in policymaking authority will also need to be addressed. 

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This is an adapted version of ISEAS Perspective 2026/48 published on 7 July 2026. The paper and its references can be accessed at this link.